Among the many changes induced by the pandemic were perceptions and spending habits revolving around advertising. On Wednesday, Borrell Associates’ Corey Elliott took INMA members on a ride through the past, present, and future to understand how attitudes have changed and what that means to publishers.

Elliott, who is executive vice president/local market intelligence for Borrell Associates, presented information during the members-only Webinar from the company’s annual Local Advertiser Survey, its SMB Panel, and its 2022 Compass Marketing Study.

Three areas of advertising revenue are showing continued decline in 2022: directories, newspaper, and other print. “These are the three media that have fallen every year [since 2019],” he said. “Other media had some down years, some up years … these three, on a local level, have seen declines year over year.”  

However, Elliott clarified, newspaper does not include digital or other forms of advertising offered by news media companies. And, he said, it appears the drop is stalling rather than continuing, which could spell good news for print.  

While print advertising continued to dip, new areas show promise for publishers: “Streaming audio, streaming video, and targeted banners have all gone up over the years.”

He explained that targeted banners include any type of digital advertising targeted to an individual — which is “pretty much any advertising on the Internet.” While the actual dollars being spent on audio is still rather low, spending on video/OTT has risen sharply in the past three years and it is quickly gaining on targeted banner advertising.

Taking a long view at advertising, Elliott tracked trends back to 2000 and showed where advertisers put their money and how things have changed. While digital has shown tremendous momentum in the past decade, he predicted the increase won’t last forever.   

“It’s going to start leveling off in 2025,” he said.

But it remains a powerful tool for companies. For most local businesses, digital became the way they interacted with customers during the pandemic. It was their way to tell their story to customers, and, in today’s world, telling a story has become key. The current environment is less about pushing products and more about telling a company’s story — again, something news media companies are good at doing — which means the opportunity is there for media to explore new ways of helping businesses get their message out.

Where are we now?

Retail stores enjoyed growth during 2020, and that continued in 2021 and into 2022. The exception is department stores, which have seen declines since 2016 and experienced a dramatic drop in 2020. (The real winners during 2020 — and are still going strong — were liquor stores, which jumped from US$5 billion in annual sales to more than US$8 billion.)

Although small business owners were starting to show some optimism about the economic conditions in 2021, that started to slide by the end of the year. And by May of 2022, most businesses considered the economic conditions to be fair or poor. And the majority believe it’s just going to get worse.

So what does that mean for their marketing budgets?

“You still have about half saying they’re going to maintain their spending,” Elliott said. “That’s significant because compared to last year, they’re more pessimistic about the next six months. But half will maintain their marketing spend and another 20% are going to increase their spend. That’s significant.”

What it means for news media

Advertisers have changed the way they think about newspapers, digital, advertising, and marketing. They see newspapers as being able to help them tell their story, Elliot said: “This is a shift of a mindset. And it’s one that can — and should — be leveraged in many ways.”

Borrell Associates found 64% of local advertisers used content marketing in 2021 to tell their stories. Among advertisers, 38% increased the amount of content marketing they did in 2021, and for 2022, that went up an additional 42%.

“So there’s a tremendous interest in content marketing and getting a different kind of story out,” he said. The main reason companies said they are using it is to “tell a story and connect consumers with meaningful content.” And they also see it as a way to stay competitive and grow their business.

“This is an incredible opportunity for local media companies,” Elliott said. “Who else knows how to tell a story? Who else knows how to get in front of the right people? It’s a perfect combination. There’s a good, good fit here.”

As video becomes more prominent, media companies have even more opportunities: “I think this is a place where local media companies could own the space,” he said.  

And, when newspaper and digital offerings are combined, it creates a strong offer for local businesses. Borrell found 68% of the times when a digital advertising component was offered, it was purchased.

One reason businesses look to local media companies is because they have a high level of marketing expertise. “That’s what businesses want right now,” Elliott said. Yesterday’s advertising jobs have largely been replaced by marketing careers, and the No. 1 marketing skill local advertisers are looking for is social media and management. Again, this represents more opportunities for news media companies who are bringing Gen Z into the mix.

“Gen Z has grown up creating content,” he said. “Put that back into content marketing that’s important, video that’s important — this is the group of people that could naturally step into this role.”

Instead of looking for more advertising choices, today local businesses are looking for guidance from news media companies to know what to do with the options in front of them. This is the ideal time for news media companies to put their focus on how to provide that guidance along with the growing number of advertising options.

“Local businesses want and need marketing help,” Elliott said. “They want that more than a plethora of products.”

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