Borrell's Local Advertising Outlook Sees A 5.9% Drop For Radio
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January 11, 2013 at 3:59 AM (PT)
BORRELL has released their 2013 Local Advertising Outlook, and finds "ad spending nationwide should rebound by a healthy 7.5% this year, but the real story is in the local space, which is forecast to grow 8.2%, from $88.9 billion in 2012 to $96.2 billion in 2013. The headline isn't that 'local' is growing mildly faster, but that small and medium-size businesses (SMBs) are choosing to spend their marketing dollars in dramatically different ways. Their spending on local online media this year promises to be nothing short of phenomenal. Our surveys and trend analysis indicate potential growth of 31%, from $18.7 billion to $24.5 billion, or one-fourth of all local advertising. That outstrips 2012, when we saw local online advertising grow 20%."
But there's bad news for radio in the report, with BORRELL forcasting a 5.9% drop for local radio.
BORRELL sees radio's national ad revenues at $2,910.2million, for 1.7% of the spending. Local radio is expected to see $11,013.7million, for 11.4% of revenues, for a total of $13,923.9million or 5.3% of ad revenues.
Among the other findings in this report:
* Online media will likely hold the #1 spot in terms of local ad share, beating out newspapers -- the centuries-long leader -- in all but four U.S. markets.
* Cinema advertising is growing faster than online, at a healthy 42%.
* Along with radio, local magazines, shoppers and alternative newsweeklies are expected to drop 2.5%.
* Only 20% of advertisers in the year-end survey of 1,756 SMBs said that they planned to increase online advertising, while 52% said they planned to spend the same. This indicates that the growth in online advertising might come from newcomers and high-rollers.
* Top areas of spending increases for SMBs this year are online, mobile and direct mail. Under the "online" category, social media and "my company's website" are being earmarked for the largest increases.
* SMBs show high interest in mobile, and the few who have tried mobile campaigns seem hooked. Some 83% of SMBs who’ve used mobile said they’re likely to continue.
Is Your Digital Strategy Brilliant? Less Than 5% Say Yes
RAB and BORRELL ASSOCIATES are taking a peek at how radio's digital ventures are shaping up. The survey is intended to gauge the "real" amount of online ad revenue stations are generating. BORRELL shared some of the preliminary findings. Among them:
* More than 40% of respondents thus far say their digital strategy is bad, or don't know if they even have one. Percentage who said their station's strategy was "brilliant": less than 5%.
* More than half of the estimated 400 stations responding thus far say their sales reps have no specific goals for selling digital products.
* More than two-thirds of respondents say they believe online ventures hold "significant potential" for radio stations. Yet 54% of respondents rate their sales reps' ability to sell digital products as "poor."
Want to participate in the 3-minute survey? Click Here. The results, which will include an analysis of BORRELL's data from more than 1,300 radio stations reporting digital revenues, will be published next month. BORRELL has promised ALL ACCESS a sneak preview.