This Thursday, a day after Gordon Borrell moderates our Executive Super Session at Forecast 2023, in New York City he’ll host a webinar to unveil his local advertising predictions for 2023. Borrell’s panel will include…
Beasley Media CEO Caroline Beasley, iHeartMedia’s Greg Ashlock, Standard Media Group CEO Deb McDermott and Hearst Television President Jordan Wertlieb. There’s still time to register for Forecast HERE.
During Borrell’s Thursday webinar his company will predict that local ad revenue for 2023 will remain flat. “A combination of economic pressures and a dramatic turnover in the composition of local businesses will inflict a double-whammy on local advertising next year, according to the 2023 Borrell forecasts.”
Borrell is projecting that local advertising will hit $120.7 billion in 2022 and $121.5 billion in 2023, representing 0.6% growth. Borrell said. Digital forms of ad spending are forecast to grow 5.2% next year, while traditional forms of print, broadcast, outdoor and cable are collectively forecast to drop 6.5%. Broadcast TV will suffer the largest drop, declining by double digits, according to Borrell.
“The source of local advertising is local business, and we’re seeing a dramatically different profile caused by businesses that collapsed or shrank, and by a record influx of new businesses that replaced them,” said Corey Elliott, Executive Vice President for Local Market Intelligence. “Anybody trying to forecast 2023 based solely on past trends is going to have a tough time.”
Elliott said the new forecast is fueled not only by the collapse of millions of businesses due to the pandemic and by this year’s economic challenges, but also to the creation of twice as many new, smaller businesses that are quite different than the ones they replaced. In preparing its forecasts, Borrell found the number of U.S. businesses with fewer than 10 employees nearly doubled, while the number of businesses with 25 or more employees declined since March 2020.
Moreover, Borrell found that 6.2 million “high-propensity businesses” – or those designated to be more likely to succeed and grow – have been formed since 2019. Most of the growth has been in businesses with fewer than 10 employees, while the number of businesses with 25 or more employees has declined since the pandemic.
“Because bigger businesses spend more on advertising and smaller ones spend less, this poses challenges to media companies,” Elliott said. “It also creates a situation where many of these new entrants are invisible because, as they begin operations, they tend to not spend much money on advertising, or spend most of it on things like search advertising or other forms of digital advertising.”
Register for Borrell’s webinar at 11 a.m. Eastern on Thursday, Nov. 17 here.