Borrell Associates: 2018 Local Ad Spending to Jump 7.6%

BY Kathy Crosett
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After a year in which traditional media struggled to show an increase, the local ad market looks brighter for 2018. Borrell Associates is basing its prediction of a 7.6% increase in next year’s local ad market on research it conducted this summer. Here’s what you need to know.

The Borrell survey encompassed over 3,500 local advertisers across the U.S. Over 60% of these businesses have 25 or fewer employees. Over half of these respondents give themselves the grade of ‘novice’ when it comes to understanding marketing, an indication that many of these folks want to hear what their media sales reps have to say.

The biggest winner in the 2018 local ad market will likely be digital again with a 16.8% growth rate over this year. This statistic is not surprising considering 57% of survey respondents plan to increase digital ad spend next year. On average, about 26% of  local marketers' ad budgets are currently going to digital advertising. Next year, these folks only plan to allocate 4% of their ad spending to social media.

Local TV also looks remarkably strong with a projected rise of 14.6% for 2018. Advertisers tell researchers that broadcast TV delivers a greater value for the money than other formats, a sentiment that bodes well for the future. The only other categories likely to grow next year are out-​of-​home at 2.8% and telemarketing at 1.4%.

Other ad formats will either see declines or remain flat in terms of 2018 demand:

  • Directories (-10.1%)
  • Newspapers (-10.3%)
  • Other print (-7%)
  • Radio (-3%)
  • Direct mail (-2.8%)
  • Cable TV (-2.0%)
  • Cinema (no change)

Local businesses also told researchers they allocate about 5.9% of revenue to their advertising efforts. Here’s how Borrell analysts estimate the media mix breaks out for the typical small business you are trying to sell to:

  • Broadcast TV 22%
  • Cable TV 12%
  • Radio 11%
  • Search 8%
  • Outdoor 6%
  • Direct mail 6%
  • Event marketing 4%
  • Social media 4%
  • Magazines 3%
  • Display ads 3%
  • Impression-​based, ROS 2%
  • All other, including newspaper 12%

Have you talked with your clients about how they’ll allocate their advertising budgets for 2018?