If you think Borrell’s prediction of 37% growth in digital ad spend in 2016 is crazy, consider this: In 2015, local digital ad spend grew by 35% and Borrell is making that bold prediction for 2016 based on a survey that showed nearly 60% of SMBs plan to increase digital advertising. Borrell projects that in 2016 local businesses will spend nearly $66 Billion on some form of digital advertising. The three most popular ways businesses are spending money on digital are targeted display, video, and audio. Declining formats include e-mail, paid search, and run of site display.
Borrell says to just say that digital is taking money away from traditional media, like radio, is too simple. “We believe SMBs are actually increasing their ad budgets — as evidenced by this year’s unusual growth forecast of 16.4% — just to spruce up their online presence. Our SMB research shows that even the smallest of advertisers, who typically spend very little on any form of advertising, are finding at least some budget to buy into the digital game. We also believe that some of their spending is erroneously marked as “advertising” when, in fact, it’s merely a technical task or marketing service. Many SMBs consider what they spend on SEO or website design as “advertising.” While our estimates attempt to separate those two distinctly different buckets, the lines are still a bit blurry.”
I suppose radio does “get lucky” anytime the economy in general or particular advertising categories allow for more ad-spending. Nobody is going to turn down that business.
However, I am reminded of the two vultures sitting atop a telephone pole in the middle of the badlands – waiting for something to die in order that they might scavenge the carcass.
A period of time goes by when one vulture turns to the other and sez, “I’m getting pretty tired of this – waiting for a body to show up. Let’s just go down there and kill something.”
Radio is still perched on that pole.
This is big for radio to see that the overall growth in ad spend is increasing by a substantial margin. Means that the ad dollars aren’t simply a reallocation of budget. I look forward to the type of ROI or ROAS (Return on Ad Spend) that Borrell projects as a result of this big increase.
-Gabriel
DRS Media