Borrell Associates just released its 2025 Annual Local Digital Media Benchmarking Report. The 23rd edition shows many perils for traditional media companies, but it also suggests opportunities for business development – not only in digital, but also for traditional advertising.
While local digital media spend has crossed the $100 billion mark and will continue grow dramatically, traditional radio advertising is projected to dip by $1.5 billion over the next three years. One opportunity outlined in the report comes from the massive influx of new businesses and their growing marketing and advertising needs.
I had a conversation with found Gordon Borrell on Wednesday. Our conversation has been lightly edited.
You discovered a fascinating trend about new businesses in the US since 2020
Yeah, we’ve been tracking it since the pandemic. Around the beginning of 2021, we just started noticing a surge in new business applications, and it makes sense. People got laid off, so they started their own businesses — and lots of them.
The annual growth in new businesses since the pandemic has accelerated. The period prior to the pandemic from 2014 to 2019, the number of business applications was right around 3.5 million per year. Post-pandemic, it’s been about 5.5 million.
These small businesses are coming into the market using digital media and creating their own websites, their social media pages, and their e-mail lists, and becoming pretty masterful using of those to build their businesses. They didn’t have the money for traditional media, and guess what? Digital media worked.
So here’s the really interesting thing: we wondered what businesses that have been created since the pandemic are doing, where are they increasing media spend as opposed to older businesses.
Almost across the board, they’re more likely to be increasing their spending in traditional forms of media. In fact, they’re twice as likely to be planning to increase radio advertising this year. It’s 14% of them saying, “Hey, we’re going to either spend more or start spending for the first time in radio.”
That’s not a small percentage. Anecdotally, they’re trying to differentiate themselves from other businesses that are spending only in digital media. They want to be seen broadly seen and heard, and they’re successful enough that they now have money to spend serious money to spend.
So it’s a matter of finding these businesses looking to buy traditional media?
The way that radio sellers find these new businesses does not exist. The old prospecting methods are “eyes and ears.” You can’t find them by driving to work and seeing these businesses on a billboard or listening to a competitor’s radio station. The problem is that these businesses do the majority of their advertising in digital, and almost all digital is targeted.
If these are newer businesses, what’s the experience level of the marketing decision-maker?
We ask advertisers how long they’ve been making marketing decisions and how many hours a week they typically spend on it. The new wave of businesses have hired a phenomenal amount of marketers with low experience. The Bureau of Labor Statistics shows there’s been a big surge in the number of job postings entry-level marketers. And that just showed up in our calculations of local marketing expertise. The percentage of novices has risen. They’re newbies and haven’t quite been introduced to radio or TV. All they know is Instagram and Facebook and things like that.
If you were handed a small or medium sized radio company, what would be your top strategic priorities for 2025-2026?
I would make absolutely, positively, 100% sure I was doing my best selling radio. That is 80% of your revenue, and that is the soul of funding for what you want to do in digital. I want to make sure that my core business was really buttoned up as much as possible — make sure we have the systems in place and the CRM is great.
I would invest in the in the sales process. And then in very short order, I would test my sales reps to determine how much expertise the sales reps actually do have in digital, do they know what SEM means? How would they respond when an advertiser asked them whether Instagram Reels is a good opportunity for their business? I want to know what the response would be. I don’t really care whether they know the answer yes or no.
However, I would get rid of the people who would say, “Oh, all that TikTok and Instagram Reels stuff, that’s just a bunch of hoo-ha.”
Focusing on the whole sales process is really, really important, and it’s bringing up to speed and weeding out the people who are hanging around until retirement and not excited about the new opportunity.
Shore up the traditional revenue engine while building a new one in digital that is going to propel me into the future.
Gordon Borrell founded Borrell Associates in 2001 and has become the local media industry’s expert on tracking, analyzing, and forecasting marketing and advertising spending by North American local businesses. Reach out to Gordon at info@borrellassociates.com or 757-221-6641. Download a summary of this year’s report at https://borrellassociates.com/
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