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At Borrell Miami, Media and Advertisers Face the Future ‘Full Tilt.’


Digital ad revenues are forecast by Borrell Associates to grow 5.8% this year, for a second consecutive year of single-digit growth following annual double-digit expansion since 2001 and a pandemic-fueled spike of +15.3% in 2021. The deceleration will continue next year with 5.0% growth expected, followed by +3.5% in 2026 and +2.9% in 2027, when 75% of all local ad dollars will flow to digital, up from 53% in 2018, per Borrell.


“What we're going to see over the next several years is a flattening of the growth to the point at which all digital media will grow roughly at the same rate as all types of advertising,” CEO Gordon Borrell said Monday.


The profile of local ad buyers continues to evolve with the congested media landscape they’re trying to navigate. As they gain marketing expertise, they’re getting more sophisticated – there are fewer novices, and more practitioners and masters. “They're getting a lot smarter and they're really figuring things out a lot faster than you might think,” Borrell said in the opening session of the firm’s 14th local advertising conference.


In five years, what are considered novice marketers have evolved into mid-levels marketers, based on how many hours a week they spend on advertising and marketing decisions. Within about three years, one third of local advertisers will have graduated to master marketer status, one third to mid-level and only a third will be novices. Which begs the question: Are your sales rep going to be as smart – or smarter – than your local advertisers?


Along with getting savvier at marketing, local ad buyers are trimming the number of media types they buy and slimming down their list of local media partners. In 2023 local ad buyers bought an average number of five types of media, down from eight in 2017. And they worked with an average of four local media companies in 2023 – two were the median and one was the most frequent answer. “We're down to that point where they pick their partner, and buy whatever they need to buy from them,” Borrell told the conference crowd.


What’s more, local ad buyers are slowly cutting out sales reps in favor of self-serve DIY buying platforms. While 57% always dealt with a sales rep in 2019, that dropped to 41% in 2023, while the number who never deal with sales rep increased to 20% in 2023 from 7% in 2019. Meanwhile, from 2016 to 2023 there were 22,000 salespeople laid off, or about one third of the local advertising sales force.


A growing number of local advertisers are ready to try a new form of advertising. What prompts them the most to try something new? Borrell’s survey of local advertisers found trackable metrics are what local media companies need to bring to the table to win them over. Targeting capabilities and proof of delivery tied for No. 1 at 33% apiece.


The researchers at Borrell also asked local advertisers, “What causes you to buy from a local media company? The top answer was an elevated level of marketing expertise, which points to the need for radio broadcasters to provide continual training for their sellers. No. 2 was a company that provides a “partnership, not vendor attitudes.” Third was a company that furnishes a transparent marketing plan and fourth was a company that “thinks about my business, not theirs.”


“There's some great, great opportunity out there,” Borrell said. And one of the biggest is selling OTT/CTV video advertising. As of last year, the ad dollars allocated to OTT were twice as large ($22.4 billion) than they were for linear television ($11.4 billion). This coincided with OTT viewing surpassing linear TV for the first time in 2023. “Local ad buyers are only just beginning to embrace OTT,” Borrell said. “A lot of advertisers are new to this; they've never bought video advertising. This is where you come in. This is where your future riches are.”

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