Borrell: Local TV Advertisers To Up Digital Buy

TV advertisers are feeling pretty good about local TV these days, but they’re also feeling pretty good about digital media, particularly social media, with 68% of TV advertisers planning to increase their digital media spending in 2017, according to a new report from Borrell Associates.

The report says that sales reps from other media are trying to pick off TV advertisers because they have more money and are receptive to digital. “Broadcasters need to realize that it’s their game to lose,” the report cautions.

Borrell predicts local TV ad spending in 2017 will be down 16.7% from this year. The decline, it says, is due to 2016’s surge in political advertising. Compared with 2015, next year’s TV spending will be roughly the same, at $10 billion – a “significant accomplish when virtually all other traditional media is declining,” the report noted.

Businesses that buy local TV commercials are the biggest on the block, spending three times more on advertising than the typical local business, Borrell says. And they’re being heavily targeted as a result, getting an average of 40 sales calls per month by reps, 66% more than the average SMB.

Some other findings:

• TV advertisers are digital ready, with high expectations that TV reps can help them in this area.

• TV advertisers are ripe for mobile marketing; 70% of them plan to start buying or are increasing their spending on mobile media.

• Social media is big and getting bigger; 81% are buying it, they rate it highly (especially Facebook), and many give it equal footing with TV spots in terms of its ability to generate new customers.

• More than one-fourth of TV advertisers are planning to either increase spending on Cinema and Mobile media, or try it for the first time.

• They view social media and their own websites on par with TV commercials in terms of driving new customers; they now spend $64,198 on digital media, rivaling the $84,168 they spend on TV spots.

TV Advertiser Characteristic

• Businesses that advertise on local broadcast TV stations tend to be older, larger, independent companies with more than $1 million in gross sales.

• They’re equally as likely to have a single location vs. multiple locations, and slightly more likely to cater to other businesses (B2B) versus only consumers.

• The average annual TV budget is $86,894, or 54% higher than the average budget for cable and more than double that spent on any other medium.

• TV advertisers spend, on average, $325,719 annually on advertising — three times more than the average local advertiser.

What Else TV Advertisers Buy

• At least two-thirds of TV advertisers also spend money on Internet, radio and newspaper ads.

• More than half of TV advertisers also buy cable spots and direct mail.

• Not very many TV advertisers (14%) are buying ads on local cinema screens.

What’s In, What’s Out Among TV Advertisers

• 70% plan to start buying or increase mobile

• 68% plan to start buying or increase digital

• 38% plan to start buying or increase cinema

• 31% plan to start buying or increase direct mail

• 51% plan to cut or eliminate yellow pages

• 41% plan to cut or eliminate newspapers

• 37% plan to cut or eliminate magazines

 What Drives Leads for TV Advertisers

• While 56% of TV advertisers believe that TV spots are a good way to generate new customers, conversely, 44% did not think so.

• About half of TV advertisers view their own websites and social media as significant drivers of leads – almost on par with TV spots.

• The number of choices on this chart, and the fact that few of them were selected by the majority of respondents, indicates that advertisers have diverse opinions on the “best” source of new customers.

What TV Advertisers Spend On Digital

• TV advertisers’ average digital spending is $64,198, rivaling what they spend in an average year on TV spots ($84,168).

• One-third of their digital spending goes to search engines.

• One-fourth goes to social media.

• The average expenditure on TV websites is $3,995 a year.

• Internet radio (Pandora, iHeartRadio, etc.) is a significant competitor to local “media” websites.