It’s no secret the pandemic changed the news media business, but during this week’s Webinar, INMA members learned how it affected advertising — and advertisers’ attitudes.

Corey Elliott, executive vice president/local market intelligence for the U.S.-based Borrell Associates, shared results of Borrell’s annual survey and broke down what it means for news media companies. The 22-year-old company specialises in collecting and analysing local ad spending data and has a large database of ad spending data throughout the United States.

During Advertising Insights for Media Companies: Borrell Associates’ 2023 Survey, Elliott explained how advertisers and agencies view advertising within the news media industry.

To provide perspective, Elliott began with a glimpse of where advertisers were a year earlier and then looked at how the outlook of local advertisers has changed since then.

“Since the pandemic, there has been an incredible growth in small businesses in the U.S.,” he said, noting he was referring to companies with as few as 10 employees. “[They] really grew during the pandemic because people left the big jobs and started their own. It could be a side gig, it could be their main source of employment. But this incredible growth of very small businesses happened.”

At the same time, he said, there was a spike in OTT or over-the-top or digital video, and content marketing also grew.

“This was a fascinating one to watch during the pandemic because content marketing is telling your story,” Elliott said. “And it was born naturally out of the pandemic when local advertisers had to make sure they told their story and let everybody know what was going on with their business.”

For many companies, that was their first experience with content marketing, and they soon realised it could be used to effectively grow their business.

Another change seen since the pandemic is what advertisers need from their local media companies. The No. 1 thing they’re looking for today is a high level of marketing expertise. But they also want:

• A partnership rather than a vendor attitude.
• A transparent marketing plan.
• Someone who is thinking about the advertiser’s business, not their own interests.

“These are four things to keep in the back of your head as you look at all this other data,” he suggested. “These four things are still relevant and still what they want. You can satisfy these. You have something you are providing that local advertisers want.”

What marketing expertise is needed?

Borrell “went down the rabbit hole” to learn more about what marketing skills and expertise advertisers find most desirable in a post-pandemic market, Elliott said. Topping the list is social media marketing and management: “They want plans, they want marketing. They think social media marketing is the most important skill to have.”

Importantly, the survey also asked advertisers if their local media company delivers in that area and found that media companies are not, in the eyes of advertisers, delivering the attributes and expertise they want.

“What concerns me here is, at least in the U.S. and from the people we talk to, media companies are really good at delivering the things that are not as important [to advertisers],” Elliott said. “[And] they’re worse at delivering the things that are really important.”

How outlooks have changed

Taking the temperature of advertisers allows Borrell Associates to look ahead at where ad spends could go in the coming months. While the outlook isn’t back to pre-pandemic optimism, about one out of every five advertisers said they will increase spending in the next six months.

“There was a lot more uncertainty in May of ‘22,” he said. “So we’re better than May 2022 and we’re starting to get into a new rhythm, a new pattern. So altogether, local businesses just told us the new normal is here, and half of them believe it’s tougher than it was six months ago, but more say current conditions are positive.”

They are seeing things turn — slowly — as advertisers become a bit more positive, he said.

Where that money is going to be spent, however, is changing.

In 2022, about 10% of advertisers spent less than they had planned, and 22% spent more than planned. The main category they spent more on was social media, but social media also was where the most spending cuts were made among companies that were struggling last year. Social media may be losing its appeal as an easily available and highly affordable marketing vehicle, Elliott said.

In 2023, 73% of advertisers viewed social media as a “necessary evil,” and just 34% saw it as the best place to reach their customers.

“I'm not saying they’re throwing social media out by any stretch of the imagination,” Elliott said. “But the shine might be wearing off a little bit as other things, especially things like OTT and content marketing, come up.”

What it means

Based on the survey responses, Elliott concluded one of the biggest effects of the pandemic has been that it brought marketing efforts closer to local businesses and changed the way they view the need for an advertising agency or even a news media outlet:

“They had to figure things out because they cut back their ad spend, but they still had to get the word out and they had to figure out how to do a lot of stuff themselves,” he said. “I’m not saying they’re doing it right, but they brought that marketing [in-house] and I think that’s why they aren’t sure how an agency or a media company would fit in now.”

Advertisers are also living in a time when business is still challenging, but they are more hopeful that things will be better moving forward.

“The present situation [for advertisers] is things are OK and we’re hoping for better, but man, the last six months has been tough. That’s the new normal.”

But going through so many changes could have helped open advertisers’ minds, as the survey shows they are more willing to try new things: 34% of those surveyed said they’d be open to trying new formats or approaches to see if they would work.

And one final discovery that’s important for news media companies to recognise is that advertisers want marketing help, but they aren’t sure where to get it.

“Nobody has come to them and showed how a local media company or a local agency could benefit them in that way,” Elliott said. And that presents a massive opportunity for media companies and the advertisers they serve.

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