The prognostication presentation came as a result of a survey of 2,102 Small and Medium Business managers conducted in August & September 2014 combined with an analysis of Borrell’s database of marketing expenditures covering 3,000 U.S. counties.
Borrell wanted to know:
- Is the Golden Age of Advertising coming to an end?
- What will the media company and ad agency of the future look like?
- Half of the 15,433 radio stations currently on the air will cease to exist.
- “It will be the weakest stations we believe that will disappear, reemerging in the form of promotions.”
- "Local advertising as we know it disappears, but it reemerges in the form of promotions,”
- New dashboard technology will cause long-term listening erosion for FM/AM radio.
- “Inevitability” of radio-enabled smartphones.
- “All of these businesses out there have the medium at their disposal to go direct to consumers.”
- Sales reps won’t sell ads but help educate local businesses on how to create and perform promotions.
- 95% of advertising will be bought and sold programmatically by 2024
“Radio tends to have a very strong beat on promotions. All of these businesses out there have the medium at their disposal to go direct to consumers.” -- Gordon Borrell
My take: allowing media buyers to convince us to move away from direct local, regional and national selling person to person toward numbers-based programming buying will devalue radio.
In the short run, it may save up to 30% of gross revenues by lowering cost of sales, but if radio polishes its immediate bottom line while failing to invest in face-to-face presentations of our ROI strengths vis a vis all other competing media, it won't even take ten years for Borrell's pessimistic prognostications to become self-fulfilling.
A full analysis of the results can be found in “2014 Digital Marketing Services Outlook” on the Borrell website.