Local advertisers are evenly split about whether they’re going to increase their marketing levels in the next six months, according to the latest Borrell Business Barometer. The data shows 17% of small and medium-sized business leaders think they will increase their advertising budgets, while 18% expect to pull back on spending — with nearly two-thirds (65%) predicting their budgets will remain on par with current levels.
Corey Elliott, Executive VP of Local Market Intelligence and Borrell’s chief forecaster, says in his latest Marketing Minute video that while it is not great to see so many businesses say they plan to pull back on advertising, the reality is that number has remained fairly stable during the past several years. In May 2022, Borrell reported 20% planned to cut budgets, and last May it said 19% would.
Elliott says Borrell has also seen a “slight improvement” in how Main Street businesses are assessing the current economic situation. The latest Borrell Business Barometer data shows three in ten small and medium-sized businesses rate the current economy as good. That is up from a quarter that said the same thing last August.
Borrell also reports that more businesses said things are better than worse, with 21% telling the firm that they would rate the current economic situation as poor. That is down three points from August.
Elliott says small businesses have been more pessimistic looking back in time. The Borrell Business Barometer shows 8% of panelists think it has gotten easier to run a small business during the past six months, while 52% think it has gotten harder. While lopsided, that is fairly consistent with what Borrell has seen during the past year.
But business leaders are somewhat less gloomy about what lies ahead. Asked about what direction they think business conditions will head in the next six months, Borrell’s survey found one in three (32%) think things will get worse, while 9% expect to see things improve.
Elliott says the numbers give him some encouragement to know that looking backwards that there is decreasing pessimism. And that could have implications for how they spend their advertising dollars. “Looking forward, a business may have the same perspective they had in the last two years. And that sure beats 2020,” he said.
Earlier this month, Borrell updated its 2024 Local Ad Outlook to offer a more tempered picture of the advertising marketplace. It expects total local ad spending to climb 3.2% this year. Elliott said that SMBs’ attitudes about the economy and their plans to invest in advertising have been largely unchanged, and that means the hoped-for spring-back in spending has yet to occur. While it expects radio to post a 2.3% decline in over-the-air ad revenue, Borrell is forecasting online audio will help make up the difference, with streaming radio and podcasting ad spending expected to increase 7.8% vs. a year ago.
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