September 12, 2016

Forecaster and analyst Gordon Borrell has just published his summer survey of 7,500 local advertisers with results that manage to be alarming but at the same time not surprising.

Yes, there is a strong swing to digital and social. And yes, most advertisers subtract from their legacy media budgets to increase digital spending. But particularly striking is a quick adoption of Facebook as a primary marketing focus. Borrell found:

  • 90 percent of the advertisers now have a social media page.
  • 62 percent are advertising on Facebook this year. That is more than use Google, Twitter and LinkedIn combined, and double the percentage for Facebook a year ago.
  • 90 percent who use Facebook are satisfied with its effectiveness. Social media now rates high in generating new customers, lagging only companies’ own websites and referrals.

Borrell’s measures are for spending so far this year and planned for the balance of 2016.

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While 40 percent of the advertisers are increasing their digital spending, only 15 percent have increased overall marketing budgets. Newspapers and local magazines take the biggest hit to make up the difference with some erosion of broadcast and radio budgets too.

Borrell’s sample ticked off a number of factors the advertisers like about digital in general and Facebook in particular — in order:

  • There is more data about who we’re reaching.
  • It’s easy to buy, track and understand.
  • It works better than other types of advertising we’ve used.
  • We have more control of the budget, timelines and creative.
  • It’s inexpensive.

The news wasn’t all bad for traditional media. Roughly half still consider broadcast, cable, radio and local print effective and likely to remain in a comprehensive marketing plan. Newspaper websites trailed social and search but figured in the plans of 28 percent of those surveyed.

Also, a great many of the companies report that they need help with their websites and social marketing efforts. So the boom in digital marketing services to replace declining newspaper advertising revenue should continue.

But Borrell found fault with how some newspapers are selling, as well. Many of the advertisers complained that they are being “pestered” by numerous in-person sales calls. These have jumped from an average of 14.7 a month to 23.7 a month just in the last year.

Once a relationship has been established, nearly 80 percent said they prefer to be pitched and place orders via email.

Advertisers now find the sales reps they talk with knowledgeable about digital but less so about marketing. One insurance agent advertiser commented:

Learn about your customers and what their needs are then fulfill them. Stop trying to just “sell” a standard package to everyone. Do business with a handshake. Establish credibility. Become a marketing partner and someone that can be counted on, not just the ad rep du jour.

I asked Borrell by email whether local media simply need to accept that they will take a backseat to Facebook and other digital platforms and settle for a supplemental ad buy.

Yes and no, he replied:

What happened to blacksmiths a century ago holds a lesson for local media. They stood outside with idle hammers as their customers waved from passing cars. Two groups formed: doomed blacksmiths, who continued to see their business as shoeing horses and fixing wagons; and the successors, who saw their job as serving the transportation needs of their communities and put up gas pumps, fixed flats, and worked on gasoline engines (none of which, by the way, required the skills a blacksmith possessed). Some of them even became car dealers.

If local media determines their role is actually to serve the marketing needs of businesses, they can ride on to greater shares. Many of them are.

In small and mid-sized markets, he added, many newspapers have done enough in digital to stay dominant. But that is the exception in metro markets where competition is tougher.

“The doomed ones are still not swallowing the digital pill,” Borrell concluded.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
Rick Edmonds

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