Survey: The Opportunity Isn’t Selling More Ads. It’s Selling Confidence.

Local advertisers may be more willing to spend than many media sellers realize. According to new survey data form by Borrell Associates, half of small and mid-sized businesses believe they are currently underspending on advertising and marketing.

In the latest edition of his “Local Marketing Minute” video, Executive VP of Local Market Intelligence Corey Elliott says 50% of local businesses surveyed said they are underspending on marketing, up from 46% in 2022. Just 9% believe they are overspending, while 35% think they are spending the right amount.

“That’s just up a little bit from 2022 when it was 46%,” Elliott says. “These are local businesses self-diagnosing this problem. They don’t think they have an ROI problem necessarily; they think they have an investment problem.”

The findings challenge a common assumption among media sellers that local businesses are primarily looking to reduce advertising expenditures. Instead, Elliott says many believe they should be investing more, provided they can identify where those dollars will work hardest.

When Borrell asked advertisers what matters most when choosing where to spend marketing dollars, targeting topped the list at 35%, ahead of reach at 26%. Elliott characterizes the results as evidence of a significant shift in advertiser priorities.

“For decades, the lead question was, how many eyeballs do you reach?” he says. “Now it’s very much, are they the right eyeballs?”

That change has implications for local media sales strategies. Elliott argues that media sellers who continue leading with audience size may be relying on an outdated pitch.

“If a media rep comes in leading with reach numbers, that’s a last decade pitch,” he says. “The right pitch leads with who.”

Yet even as many believe they should spend more; many advertisers continue to focus on cutting underperforming marketing channels. Elliott says half of businesses surveyed by Borrell reported that one of their primary tactics for improving ROI has been eliminating channels they believe are not delivering results. He calls that a contradiction. “That’s defense,” Elliott says, suggesting the real issue is measurement.

Among businesses that have established a formal ROI process, 40% believe they are spending the appropriate amount on marketing. Among those without such a process, only 30% feel that way. Elliott says that gap shows advertisers often need confidence in measurement before they are willing to increase budgets.

“Measurement is the unlock here,” he says. “You don’t have to convince them that advertising is worth it. They’ve convinced themselves. The barrier isn’t belief — it’s permission.”

The survey also suggests advertisers are evaluating campaigns using increasingly hard metrics. Elliott says the most relied-upon measure of success is transactional data rather than impressions or audience delivery.

“They’re not measuring you on impressions,” he tells salespeople. “They’re measuring you on whether the cash register rang.”

For local media companies, Elliott says the takeaway is advertisers want proof that a channel works with direct link between their ad campaigns and business results. Channels that cannot demonstrate their value risk being cut, regardless of their reach.

“Your customer wants to spend more, wants targeting over reach, and cuts what they can’t see,” Elliott says. “Be the rep that gives them the permission, leads with precision, improves the work. That’s the consultant move, and that’s what they're hiring you for.”