Borrell: Local Advertisers Trying ‘Something New’ Are Trying Radio

As companies navigate uncertain terrain in the local advertising landscape, Borrell Associates reports that many local advertisers who want to try something new, are trying radio. Why? It comes down to how radio sellers are some of the best in all of media.

Hosted by Borrell, “Are Local Ad Sales in Sudden Freefall?” shed light on these dynamics, offering key insights into the mood within media companies, ad spending trends, and evolving strategies.

Digital ad revenue has seen a notable increase in the first half of 2024 compared to the previous year, with platforms like TikTok and Meta experiencing a 42% rise year-over-year. Amazon Ads and Google also saw increases of 22% and 13%, respectively. In contrast, traditional radio has faced declines, with companies like Beasley Media Group, Townsquare, and Cumulus seeing drops in their ad revenues, while iHeartMedia managed to hold steady.

Sinking television ad revenue has been thrown a life preserver this year by political spending, which is 4-7 times higher YoY. In contrast, radio still only captures less than 4% of total political ad spend.

Despite market challenges, radio is one of the few sectors in traditional media that has seen growth in digital ad revenues. For example, Townsquare grew by 1% year-over-year in the first half of the year, with Cumulus and Beasley each up 5%, and iHeart experiencing an 8% increase.

Even with global financial unease, Borrell Local Market Intelligence EVP Corey Elliott provided an optimistic outlook for local ad budgets, which are expected to increase from $88,100 in 2023 to $96,400 in 2024, marking a 9.4% jump. While only 46% of businesses plan to increase spending on at least one type of media, 41% of ad buyers are experimenting.

This is where radio as “something new” comes in.

Ranking right up there with SMS, search engine, and social media marketing, local businesses are increasingly turning to radio advertising where they weren’t before, and its all because of backwards entry.

As Elliott put it, radio reps have been seen, “Knowing their stuff about digital advertising.”

New businesses are prioritizing digital marketing as their entry point into advertising. This often brings them to radio sellers, who are increasingly being recognized for their deep understanding of digital advertising. This expertise means radio sellers often sell digital solutions first, establishing trust and rapport with clients, before introducing over-the-air options. This approach not only diversifies their product offerings but also enhances value proposition to advertisers who are looking for comprehensive media solutions.

The session concluded that while the advertising market isn’t in freefall, individual companies might be facing significant challenges. There’s a surplus of broadcast inventory leading to lower rates and fluid capital. Despite this, advertisers remain cautiously optimistic about 2025, with small and medium businesses adapting by diversifying their spending, particularly towards digital marketing services to bolster their business strategies.