The COVID-19 pandemic clearly isn’t through with the US yet, but its impact is not felt evenly across the board. Depending on the local market, the industry and the types of customers served, each business is experiencing the pandemic differently.
In response to the pandemic, research firm Borrel and Associates released new data about local advertising revenue. They project that total 2020 local advertising revenue will come in at $111.2 billion, a drop from 2019 of 13%. In case you didn’t already know that 2020 has been a roller coaster ride, Borrel’s original forecast actually projected an increase of 1.3% this year over 2019 (or, $129.1 billion in local ad revenue).
Digital vs. Traditional
COVID-19 has hit traditional advertising revenue especially hard. In 2019, traditional media sources delivered $54.4 billion dollars, and Borrel originally projected that this number would decline in 2020 by 3.5% to $52.6 billion. Post-COVID, their new forecast is much more dramatic. They now project a drop of 22.7%, to $42.1 billion.
Digital ad revenue is not expected to take such a knockout blow. In 2019, digital grossed $73.6 billion, and pre-COVID, Borrel projected an increase of 4.9% to $77.1 billion. While they no longer believe 2020 digital ad revenue will see a boon, it could be worse. According to them, we can expect to see a relatively small drop of 6.1% ($69.1 billion).
But Let’s Talk About Radio
Compared to other types of traditional media, radio actually seems to be fairing pretty well with the coronavirus pandemic. When SMB advertisers were asked if they planned to increase or start spending for a particular medium, radio actually finished above other traditional formats and was sixth overall. 12% of local advertisers said they planned to increase spending, and another 6% said they planned to start spending on radio ads.
If you’re wondering what beat out radio, you likely won’t be surprised that OTT/streaming video topped the list with a full quarter of respondents saying they planned to increase spending, and 4% saying they’ll start buying OTT ads. Other channels that advertisers are turning to ahead of radio include content marketing, social media, podcast ads and paid search.
What’s the State of Your Advertising?
Over half of 2020 is now in the history books (we know, it’s hard for us to believe too), and the uncertainty that’s marred the year so far may be starting to get under your skin. Those of us in the media industry feel most at home when we have reliable market research and forecasting to guide our decisions, something this year hasn’t wanted to give us. If you’re looking for a friend in these difficult times, our media stewards are here to help make the process of planning and buying media this year a bit less stressful. Give us a call today.