“A marketing storm was created in 2020, setting the stage for a different marketing storm in 2021.” The opening assessment from Corey Elliott, EVP, Local Market Intelligence for Borrell; during the latest webinar Local Advertising Forecast: New Trajectories in store for 2021.
Elliott did the heavy lifting of all the stats and charts for the 30 minute event, which focused on how digital has grown to a force that can’t be ignored if radio stations are looking to increase the bottom line.
“Local non digital advertising has been trending down -19.7% since 2014,” said Elliott. “The effects of that will stay for a while but we will end up flattening out into 2025. Digital advertising across the same period has grown 1.9% and will continue to grow until it flattens out around 2025. Nothing grows forever.”
Within digital, on-line video is experiencing a growth spurt.
“It is growing fast and here’s the big shocker; it isn’t just OTT, in fact OTT might be a smaller portion of this. Online video is any video that you view digitally. It’s in this number; and it’s going gangbusters. 26% percent growth in 2020, taking it to be the third largest type of media in 2020. It should surpass paid search by 2025.”
But something else is going on that needs to be pointed out according to Elliott.
“There was a hiccup where the local digital ad spend compared to the local non-digital took a jump. Local digital has been going up since 2017. In 2019 it was 57%, in 2020 it jumped to 63%. We project it will jump to 66% in 2021. In 2021, two out of three dollars that are going to be spent in a local market are going to be somewhere on-line, somewhere digitally.”
Borrell has taken a closer look where radio should look to get a bigger piece of the digital pie. Gordon Borrell joined the webinar to look at Addressable Digital Revenue.
“We know a lot of you are chasing after digital dollars and it’s important to know what is addressable, what you can actually go after in the market place, what stays in the market place, and what’s achievable,” said Borrell. “The biggest mistake that people make when they are going after these digital dollars is: number one, they underestimate the amount; and then they underestimate what they can do. So they go after their one or two or three percent share that is average for their medium. You can actually get 40 to 60 percent of your share. We did a lot of work on these numbers figuring them out for our database.”
Closing out the webinar, a question was asked, ‘What does radio have to do to survive and profit?’
“You need to take the approach that digital is the lead,” answered Borrell. “What most people forget is that the bigger opportunity with new customers is when you have digital. It’s the ability to start a conversation with a customer that’s not interested at all in radio; for whatever reason. Once you start that conversation then you can convince them if you are doing well for them in digital then they should buy radio too. We know that advertisers are starting to settle in on two instead of say five local companies. If one of them is radio, you have to be very proficient in digital. Also use digital to up sell and retain your current radio customer base. And one more thing, video, video, video. Radio advertisers are the most likely to buy video advertising. And it’s not OTT. That might be part of it, but video is a key to retaining your radio customers. That to me is the biggest strategy for radio, it’s being video-centric.”
