Cuts in radio ad spending have been deep with 22% of the firm’s monthly small and medium business panel reporting they stopped their radio buying altogether during the past three months. But that percentage is on the lower end of the list for advertiser pullbacks. In fact, 12% of advertisers said they bought more radio since the COVID-19 onset and 6% started buying the medium. Both percentages are the highest among traditional media.
“We're finding that radio is the most resilient of all traditional media, according to our surveys of buyers,” CEO Gordon Borrell tells Inside Radio, citing data the firm collected in the latter half of June.
The recession the U.S. economy entered in February has been compared to the Great Recession of 2008. But unlike recovery periods during other economic downturns, Borrell says the current one shows wide geographic differences. “Each market, and in many cases each business category is reacting uniquely,” says Borrell.
Overall, his firm foresees local advertising declining double digits this year when surging political dollars are factored out of the year-over-year comparison. But in some cities, particularly those dependent on out-of-state tourists or where lockdowns started early and ended late, things look worse.
To arrive at its new market-level advertising and marketing forecasts, Borrell Associates examined market-specific unemployment data and automobile traffic. They also interacted with 12,000 advertisers and conducted four surveys since late March to get a feel for how commerce and marketing activity was responding. “In some markets, traffic is 85% of ‘normal’ activity but in others, it's still at just 34%,” Gordon Borrell says.
But some radio sales managers may be unduly bleak in their internal forecasts, he says. In a survey the firm conducted in late May, managers were anticipating an average decline of 23% for radio advertising in 2020. Borrell estimates the actual rate of decline is likely to be considerably less, but not for all markets.
GroupM and Magna recently issued new 2020 projections for radio of -17% and -24%, respectively. Borrell's forecasts are a bit brighter. But unlike GroupM and Magna, Borrell looks exclusively at local advertising expenditures.
The firm will unveil its new 2020 forecasts for local ad spending across broadcast, print, cable and outdoor during a June 30 webinar. The outlook will also cover SEM, OTT, podcasting, email and banners. In addition, it will look at select high-change categories such as HVAC, hospitals, restaurants and furniture and at key markets where forecasts are vastly different than others. Register HERE.