Media Buying Briefing: Which media will buyers turn to in a soft local market in 2023?

By Michael Bürgi

As the entire marketing and media ecosystem braces for a rough 2023 by most definitions, local media — particularly traditional media including broadcast and print — are expected to be hit hard by revenue losses. What will save local from a deeper downward trend next year will be local ad spending on digital, digital out-of-home (OOH) media and connected TV, according to numerous media agency sources as well as Borrell & Associates, a firm that tracks local advertising in the U.S.

Borrell just last week laid out its rationale for 2023 local media expectations in a webinar, predicting local advertising will hit $120.7 billion this year, and barely grow to $121.5 billion in 2023, an anemic 0.6%. Within that, Borrell forecasts that digital forms of ad spend will grow 5.2% next year, while traditional print, broadcast, outdoor and cable are collectively forecast to drop 6.5%.

Borrell’s findings point to the disappearance of thousands of small businesses, and a shift in the type of small businesses that have popped up. (Small businesses are essentially the lifeblood of much of ad-supported local media.) In preparing its forecast, Borrell found the number of U.S. businesses with fewer than 10 employees have nearly doubled, while the number of businesses with 25 or more employees declined since March 2020.

A quick survey of media buyers, planners and strategists at both holding company and independent media agencies largely bears out Borrell’s findings, with some interesting nuances and twists.

Charlotte Mercer, COO of independent digital agency Media Two Interactive, based in Raleigh, N.C., noted that the shift to smaller small businesses could be an important factor in the continued rise of digital budgets. “My hypothesis would be that smaller small businesses that have popped up and had staying power are potentially of a younger generation than the larger businesses that went out of business during the pandemic,” said Mercer. “And those decision makers at the small businesses would be more comfortable with leaning into digital ad options, versus a more traditional mindset.”

“It’s potentially a twofold blow on local broadcast and print as new SMBs are more digitally savvy than previous [ones], and media consumption habits are shifting to streaming and digital, away from local broadcast and print,” added Eric Perko, founder/CEO of independent Apollo Partners.

It’s becoming easier for local businesses to buy digital ads beyond search, which has been a mainstay for local advertisers for more than a decade — including in connected TV, said Talia Arnold, head of strategy and planning at fellow independent Exverus Media. Just as smaller advertisers could buy Google search or Facebook ads, now NBCU’s Peacock and Hulu offer ad platforms that make it easy for local advertisers to buy their inventory, she said.

Businesses that cater to an aging demographic, such as health or elderly care facilities, are also shifting away from traditional channels to digital, Arnold said, as their audiences are increasingly cord-cutters.

Although it comes as a surprise to no one that digital continues to wrest more local dollars away …read more

Source:: Digiday