MFM/Borrell Study Suggests A Focus On Digital Sales
August 22, 2014 at 4:19 AM (PT)
Are you leaving money on the table by not focusing on digital media when selling advertising to local businesses? Quite possibly, finds a new report, "Benchmarking Local Media’s Digital Revenues," from MFM -- THE MEDIA FINANCIAL MANAGEMENT ASSOCIATION and BORRELL ASSOCIATES.
NETNEWSCHECK notes, "In 2013, according to BORRELL’s research, the amount spent by local businesses in their markets amounted to $97.3 billion of a total $268.7 billion. Of that amount, $24.7 billion went to digital media, representing one-fourth of all local advertising expenditures. BORRELL says the market is on track to increase local digital ad spending by 42%, to $35.2 billion this year. The research firm is projecting additional growth rates of 44% in 2015 and 37% in 2016, which would mean nearly half of all local ad dollars will be spent on digital platforms within the next two years."
The report points out the challenges ahead for radio, TV and newspapers -- the so-called “legacy” media.
BORRELL found that in excess of 50% of local digital media spending now is going to “pure-play” Internet media enterprises. The new survey confirms this, noting spending on digital media as a percentage of total ad revenue is 12% for print media and 6% for local broadcasters.
The MFM/BORRELL benchmarking survey also fiound that slightly more than a quarter (27.5%) of a local newspaper’s or broadcaster’s existing customers are also buying digital products as part of their ad spend with the media outlet. This data points to the digital media sales opportunity to the existing customers that aren’t now buying digital media.
“When we spoke with MFM members this spring, many indicated that they were forecasting digital ad sales would grow to represent 8-13% of their total ad revenues next year, which suggests they are leaving a lot of money on the table,” said MFM/BCAA Pres./CEO MARY M. COLLINS. “Arriving in time to impact digital ad sales budgets and strategies for the coming year and beyond, our benchmarking report and upcoming webinar provide a roadmap for ways local media businesses can take advantage of their reputations and relationships to grow those digital revenues by a substantially larger margin.”