Concerns have grown that the tariff policy enacted by President Donald Trump could cause problems in the local advertising market. But Borrell Associates CEO Gordon Borrell believes that 2025 still looks bright.
Earlier this month, data from the Interactive Advertising Bureau (IAB) showed that 60% of local advertisers had forecasted a 6-10% decline in their advertising budgets due to the tariffs placed on countries like China by the Trump administration.
However, since Trump has since reversed course, a market that could have been previously labeled “reticent” has since slightly course corrected, with Gordon Borrell remaining bullish that 2025 will still be a strong year for the sector.
“(Local advertisers) are really very practical, not often political,” Borrell said. “I think there was a hunkering down period that we detected in our Business Barometer … It did detect a little bit of, ‘We better put some things on hold.’ Since then, I think the strategy on tariffs has become clear. It’s just a business strategy. It’s just a negotiation strategy. And now it’s become clear, and I think people have a bit more confidence.
“That said, I don’t think there’s a strong surge in advertising,” he admitted.
Some in the local advertising game can find reason to limit or stop their spending at some of the slightest objections, like elections, natural disasters, or concern about economic downturns. Borrell said those things do occur, but trying to compare quarter-to-quarter can be a difficult encapsulation.
That’s why he looks at trends. And the trends for 2025 don’t match up with the trends seen during one of the worst years for local advertising in history, 2020.
“If there’s something really dramatic, like we saw during the pandemic — when advertising went down 50% — something did happen then. I don’t think you’re gonna you’re gonna see that,” said Borrell. “We draw up more conclusions on the sentiment of advertisers. When they say they’re going to increase something, they don’t always do it, but it signals confidence. And it signals a greater willingness to take risks. When they say they’re going to hold back on budget, it signals a lack of confidence.”
He joked that smaller advertisers can be cautious — comparing them to flocks of birds that hear a noise and then fly off in the distance until they believe the coast is clear — but believes the sentiments are that things are looking positive for this calendar year.
“I feel that the year is going to be ok. I really feel like it’s going to be fine. It’s not going to be a downer or dismal year for people. People aren’t going to stop buying. There’s plenty of money,” said Borrell. “The interest rates are still low. People are still borrowing on credit, which is fine. I’m not picking up anything from the seller’s level, either, that we’re in trouble.”
When asked what tell-tale signs there are for a potentially sagging local advertising market, Gordon Borrell had a clear-cut answer.
“Traditional forms (of media) — or more expensive forms of advertising — decline, and the cheaper forms — traditionally digital — increase,” said Borrell. “They continue to increase and decline a little bit more, but everything in traditional will go negative in a really bad period, and digital will stay positive. The only thing that increased during the pandemic was digital advertising.
“So you think about that, it wasn’t flat, it didn’t go negative, it increased. So they increased their spending in digital, not quite as much, but they cut out all the other stuff,” Borrell concluded. “That’s one key indicator that it’s still reliable. Digital is getting more and more expensive, but it’s still a reliable indicator of being off-trend.”
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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.
