Could the boom in daily deal/social media marketing at the local level be contributing to the demise of more traditional, established media formats? New projections from Borrell Associates on yellow page and direct mail ad spending are sharply negative and the shift to interactive formats may be a big factor. But the news regarding the local ad market isn’t all bad.
As part of its new service, Compass, Borrell Associates revealed negative spending predictions in the local ad market between now and 2016 when it comes to some traditional media channels. For yellow page operators, analysts see a 14% drop in demand. A cutback in spending by HVAC repair companies and home improvement contractors will significantly contribute to this decrease. And for local direct mail advertising, service providers might see about an 11% decline. The merchants most likely to move away from direct mail include auto dealers, restaurant operators and hospitals.
However, analysts remain bullish about the strength of the local ad market in general. Borrell’s new Compass service says healthy increases are on the horizon. While some markets may experience a doubling in local online ad spending, the average annual increase may be something along the lines of 17%. Ad spending increases will naturally vary by industry and format. Borrell’s analyst expect to see cinema leading the way.
If these predictions hold true, it is likely that media companies in the yellow pages and direct mail industries will rapidly expand their service portfolios to include online components in order to protect revenue share.[Source: Borrell’s New Online Compass Service. Borrell Associates. 9 Jun. 2011. Web. 24 Jun. 2011]