Borrell Associates Sees 5.9% Drop for 2013 Radio Ad Spending

Borrell Associates "2013 Local Advertising Outlook" forecasts a 5.9% drop for local radio advertising revenues. "Local advertising is expected to grow 7.5% this year, but online is stealing the headlines, says Borrell. "Our survey of SMBs [small- and medium-size businesses] at year-end 2012 offers a glimpse of what will happen this year in this comprehensive report on local advertising and marketing expenditures. Radio advertising goes down, cinema advertising goes (way) up, and newspapers finally show an uptick." The report says small- and medium-size businesses will increase their ad spending by 8.2 percent in 2013 (from $88.9 billion to $96.2 billion). However, according to the study, the only two categories that will decline in 2013 are radio, dropping 5.9 percent, and "other print," dropping 2.5%. Borrell finds that overall, "ad spending nationwide should rebound by a healthy 7.5% this year, but the real story is in the local space, which is forecast to grow 8.2%, from $88.9 billion in 2012 to $96.2 billion in 2013. The headline isn't that 'local' is growing mildly faster, but that small and medium size businesses (SMBs) are choosing to spend their marketing dollars in dramatically different ways. Their spending on local online media this year promises to be nothing short of phenomenal. Our surveys and trend analysis indicate potential growth of 31%, from $18.7 billion to $24.5 billion, or one-fourth of all local advertising. That outstrips 2012, when we saw local online advertising grow 20%." Borrell forecasts radio's national ad revenues at $2,910.2 million, for 1.7% of the spending. Local radio is expected to see $11,013.7 million, for 11.4% of revenues. That's a radio total of $13,923.9 million or 5.3% of ad revenues. Borrell says that online media will likely hold the number one position in terms of local ad share, beating newspapers, the former longtime leader, in all but four U.S. markets. Also according to the 2013 Local Advertising Outlook, only 20% of advertisers in the year-end survey of 1,756 SMBs said that they planned to increase online advertising, while 52% said they planned to spend the same. This indicates that the growth in online advertising might come from newcomers and high-rollers, according to Borrell.