Tuesday, November 04, 2014

From Borrell: Much More Than #4

No doubt you've seen the trade press on a webinar last week anchored by researcher Gordon Borrell celebrating the 20th anniversary of the appearance of the first banner ad.

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?
In spite of the fact that the "big" reason for the study had only a little to do with analog media and much more to understanding the priorities of SMB operators as it relates to digital marketing budgets, there is no denying that Gordon and his team predicted along the way:
  • 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
Since A&O&B friends Mark Ramsey and Tracy Johnson have already written prescient thought-pieces on what we need to do about #4, I'd like to focus on another very positive radio story contained in Borrell's data:  24% more of these SMB executives credit radio with providing them with new customers than television does!

“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.

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