There is upbeat news from local advertisers heading into next year: 2024 is looking good. Nine in ten local advertisers plan to keep budgets steady (69%) or increase them (21%). Just 10% plan to spend less next year. These are among the topline findings from a new survey of more than 2,000 local ad buyers and ad agencies conducted this fall by Borrell Associates.
Meanwhile, 37% of survey respondents plan to try something new next year. And while search engine marketing, banner ads and mobile/SMS text topped their “new buys” list for 2024, streaming audio is also among the top five channels they plan to try out next year.
Among the 10% of respondents who spent less on advertising this year, the top reason for pulling back was they shifted dollars to other priorities (42%), used less expensive marketing methods (33%), their business was slow or they had budgets cuts (30%), or they had no data to support spending (19%).
“Many businesses were still flailing when it comes to marketing,” said Borrell Executive VP Local Market Intelligence Corey Elliott during an online presentation of the findings Tuesday. “They weren't increasing budgets because things were working. They're increasing them because things didn't work. They're trying new things.”
Borrell’s fall survey, fielded Sept.-Nov. 2023, found that 31% of direct buyers bought radio advertising in 2023, investing an average $35,407 in the medium. Radio ranked seventh in usage among 20 media channels surveyed. About 8% of respondents said they plan to add radio to their media mix next year or increase it.
The most used ad channels this year by direct buyers were social media (used by 56% of respondents), events/sponsorships (55%), website ads (45%), magazines (43%) and search engine marketing (42%). The least effective channels were printed directories, online directory listings, other printed publications, newspapers, and magazines.
Radio found a greater uptake this year among ad agencies, where it ranked fifth in usage with 61% of agencies indicating they bought it in 2023. Agencies generally buy more media channels than local advertisers. The data show local agencies purchased or managed 10 different media types in 2023.
And when it comes to audio, agencies see more interest among their clients in streaming audio (42%). Agencies say about 30% of their clients are less interested in AM/FM radio for next year.
One in five agencies said 2023 was worse than they expected and that they pulled back in advertising as a result. Websites, radio, broadcast TV, outdoor, and events were where they made cuts in 2023.
The survey uncovered some new insights about event marketing, the second most popular form of marketing behind social media. While 55% said they used event marketing in 2023, slightly more (58%) said they plan to use it next year. Average annual spending on events by local advertisers in 2023 was $3,000 and 43% spent more than $5,000 per year on it. What’s more, 22% of current users plan to increase spending on event marketing in 2024.
Direct buyers plan to up their total ad spend by 4.2% to $110,400 in 2024 from $106,000 last year.
The latest survey of local direct buyers and local ad agencies asked respondents to rank the effectiveness of the various ad channels they used this year. Just over one third (34%) of radio users ranked it as very/extremely effective while 22% said it was not at all or slightly effective. Radio ranked 10th among 20 channels in effectiveness. Topping the effectiveness list were SEM, social media, broadcast TV, direct mail, and website ads.
In other findings:
59% now buy at least some advertising without dealing with a local sales rep
31% use a sales rep less than half the time … or never
43% plan to use AI in marketing – or already are
Perhaps the most dramatic finding from Borrell’s fall survey was that local advertisers keep paring down the number of media partners they use. The average is now 3.9 media vendors, the median number is two and the most common answer from survey respondents was one. “There is a culling, it's becoming less and less,” Elliott said.
For agencies and media companies, Borrell says next year will be about survival of the most useful. “It's really going to be tough next year with everybody competing in the digital space, all having virtually the same products [to sell],” he said. “The question is, are you going to be really useful to that advertiser and be able to answer their questions. That will help be a very sticky thing for you to keep that advertiser in your stable.”
Fielded Sept.-Nov. 2023, the survey was solicited through client/prospect lists of media companies with 2,070 local buyers and agencies participating.
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