In presidential election years, you’ll often read projections and forecasts predicting a ballyhoo of riches from political campaigns to media entities. But Gordon Borrell, founder of Borrell Associates, knows there’s more to it than that.
In 2024 alone, the words “unprecedented” often coincide with reports on just how much money is being spent on campaigns. Some projections show as much as $10 billion will be spent between presidential, congressional, and local issues in 2024.
But there are limits on avails. Television, both cable and over-the-air, has limits. Radio is in the same boat. And with “unprecedented” levels of spending, many sing the praises of this time on the political calendar.
However, that robust campaign spending leaves local advertisers in bit of a pinch. They rarely can afford to squeeze in between the multitude of political messages and can be forced into less desirable stations or dayparts to get their messaging across.
But, as Gordon Borrell points out, the options now pale in comparison to what was previously available.
“It shows up in some of our data that there are basically twice as many choices — maybe a little more than that — than there were for (local advertisers) 20 years ago, and it continues to expand,” Borrell said. “If you look at just the formats of advertising, 20 years ago, 25 years ago, this didn’t exist. There’s now paid search, there’s now banner ads, there’s now targeted banners. There’s now Facebook, Instagram, Twitter, all of social media.
“All these formats and then there are things that are not advertising, like search engine optimization, which kind of looks like an advertising expense, because it certainly drives traffic, and they have competing expenses with advertising that are internal to them that involve marketing like their own website and maintaining their Facebook page and crafting an email and sending it out.
“So the plethora of choices that they have in marketing has — I don’t say stagnated, but curtailed — the increase in advertising that we were all expecting to see. The money is going elsewhere,” Borrell continued. “Typically, internally, to their own, what we call, owned media channels. It might be their YouTube channel, it might be their Facebook page, or their Instagram page, their website, or their email marketing lists. Those are all owned media channels. Those all require resources. Where does it come from? The advertising budget.”
Coinciding with those newfound options for local advertisers is a willingness to try new things. According to data from Borrell Associates, 41% of marketers on the local level are willing to try new forms of advertising. And Gordon Borrell thinks that’s a positive.
“It shows advertisers are willing to experiment,” he shared. “So it’s like, yeah, I think I’ll try that this year.”
However, maybe conversely, advertisers still have a certain level of expectation that comes with their investments.
“Advertisers are like Wall Street investors. They like certainty. They don’t like uncertainty,” he said. “So they see inflation that worries them. It’s deflating, but not as much as they had hoped. And they’re just a little risk averse. I don’t want to paint a bleak picture of it, but the increase, or the continued bounce back from COVID, has not been as strong as it we had expected it to be, and they’re just a bit reticent.”
That word — “reticent” — is one Borrell pointed to as a great descriptor of the current local advertising market. Just Monday, the Dow Jones Industrial Average dropped more than 1,000 points, leading to questions if a recession was imminent. That, coupled with fears of growing tensions between Iran and Israel, plus a contentious presidential election, leaves local marketers weary of investing too much currently.
“We have seen for about 12 months now local advertisers just holding back. They’re optimistic. Their optimism has been growing. They believe the next six months will be better, and they started believing this in August of last year. The remainder of 2023 looked pretty good to them, but they didn’t spend as much as they said they were going to spend the first half of this year,” Gordon Borrell said.
“When we polled them again in January, it looked good to them, but they still are holding back. And then we just polled them again, I believe, at the end of June, and it was the same thing. The market is okay. It’s not as positive as we thought it would be. We’re forecasting local advertising to grow only about three and a half to 4% this year, and that is way out of line with what some of the big national firms are saying for overall advertising.”
Radio remains a strong platform for local advertisers, especially those who have been pushed out of local TV purchases due to the presidential election. And while radio remains willing and ready to accept those dollars, Gordon Borrell — who will speak at the 2024 BNM Summit in Washington D.C. next month about the role traditional media still plays in the advertising ecosystem — believes election years are a great opportunity for radio to showcase what it can provide those marketers.
“Local advertisers are a bit cold-hearted,” Borrell said with a chuckle. “They wouldn’t buy radio if it didn’t work. That said, terrestrial radio continues to be either flat or decline year after year. So it does suffer a lot of competition from all these other platforms — specifically digital — and all the other aggressiveness that other traditional media companies have in selling their own product, and that includes cable, TV, outdoor, newspapers, etc… (Radio) is holding it’s own, but it’s transition into becoming broader marketing reps and selling a lot more digital products and packaging them with radio has served them well.”
Garrett Searight is Barrett Media’s News Editor, which includes writing bi-weekly industry features and a weekly column. He has previously served as Program Director and Afternoon Co-Host on 93.1 The Fan in Lima, OH, and is the radio play-by-play voice of Northern Michigan University hockey. Reach out to him at Garrett@BarrettMedia.com.
