MIAMI — Leading economic indicators suggest an economic downturn is coming. But, what does that mean for media companies reliant on small and medium-sized business advertising contracts? The answer, says Gordon Borrell, requires one to simply look at how the largest radio broadcasting companies have fared with respect to revenue trends by category.
The digital evolution is upon us, and it is bound to only get bigger in the coming months.
Borrell’s comments came at the start of Borrell Miami 2023, a major conference focused on local advertising and the media channels marketers and brand managers are choosing for the best ROI.
With a conference theme of “Navigating Local Media’s Brave New World: Influencers, Retail Media, OTT Mania, and 1st Party Data,” future-proofing one’s ad revenue-focused business was an integral subject as the first of the two-day affair kicked off at the Marriott Biscayne Bay.
Borrell’s opening keynote put a microscope on small business growth seen since the onset of the COVID-19 pandemic. It’s been huge — there are 3.9 million more small businesses in the U.S. To put that in perspective, there are 70% more SMBs in the past five quarters than there were prior to then, and Borrell says they are likely to become advertisers.
What does this mean for media companies? The digital solution is the growth engine, and the percentage of media companies getting more than half of their advertising dollars from digital continues to grow. The latest companies to derive more than 50% of their revenue from digital: longtime newspaper industry-focused Lee Enterprises.
While that’s reshaping a newspaper business that recently saw Advance cease publication of the Birmingham News and Mobile Press-Register, “in no one industry is it more relevant than the Radio industry. Digital is fueling Radio’s growth.”
And, the Television business’ digital ad dollars are ramping up, Borrell notes.
But, the bigger conclusion, or omen, depending on one’s point of view: “Here comes Tik Tok.”
That’s not to say Generation Z is completely lost for broadcast media seeking to get ad dollars from clients seeking this consumer group. As previously reported by RBR+TVBR, the leading source for local news among Gen Z consumers is television.
The challenge is highest for legacy news sources such as newspapers, even as some have seen success in the digital world. Citing monthly unique user data for January 2023, Borrell displayed a rather shocking statistic: Kmart.com had more monthly unique traffic in the month than The New York Times‘ website.
Meanwhile, some $37.8 billion in ad dollars were seen by Amazon, putting into perspective the total dollars going to digital, and how media may wish to push their efforts to peel away some of those greenbacks from a GAFAN giant.
