Last week I recapped the essence of Borrell’s webinar outlining the Canadian “Local” ad spend landscape. Their presentation, although short, did not end there.
The rest of the session compared ad spend with total marketing spend which in a study by the Quebec government I’d seen 5 years ago identified advertising as roughly 50% of total marketing spend. Borrell suggests that where local online ad spend specifically is concerned, across the country, non-ad marketing spending is 2.5x bigger than total local ad spend. The bulk (85%) of those dollars is being spent in promotions. Online promotions represent only 5% and ad production accounts for 9% of total marketing spend.
Their forecast for the coming years is that local non-ad marketing spend will keep rising. They suggest it’s currently around $41 billion in 2011, up from $35 billion 10 years ago in 2001. They forecast it to achieve $47.5 billion in 2016. Simultaneously, they expect total local ad spend standing at $16,5 billion in 2011, up from $11 billion in 2001 should fall to $14,6 billion by 2016. The Local online ad-spend which they estimate at $2,9 billion in 2011 is up practically nothing in 2001 (relatively little being spent until 2004) should shrink to $2,7 billion in 2016. Il would shrink, yet slower than overall local ad spend thus increasing its share of that total.
Borrell Associates went on to share a snapshot of the Toronto CMA (Ontario) local ad spend landscape for 2011, as well as for Victoria (British-Columbia). Toronto as a specific local ad market generates $3.5 billion dollars, or 21% of total local ad spend across the country. Local online in Toronto outperforms the national average and is on par with community weeklies in 1st place in 2011 for local ad spend with roughly $820 million. This is ahead of directories and daily newspapers. They did not share any forecast for the Toronto market, you’ll need to pay for that data.
Victoria as a specific local market generates $195 million, or 1,1% of the national local ad spend total. Here again online also outperforms the national average standing in 2nd place behind community weeklies in 2011 for local ad spend. This is ahead of directories and daily newspapers. Borrell shared a forecast where local online ad spend is concerned for Victoria where in 2011 it stood at $13.87 million (according to them) is should decrease by 8,1% to end up at $12,75 million in 2016. Although ROS display advertising, paid search, email and online video are expected to increase in spend, targeted display is expected to shrink 35,8% (which makes no sense to me really).
In a separate segment of their presentation, Borrell Associates shared survey results from a panel of business owners on how their advertising and marketing spending will change between 2011 and 2012. For most media (local newspapers, directories, cable TV, radio, out of home, cinema, telemarketing…), local businesses expend to spend the same in 2012 as in 2011, except for online advertising where the vast majority (57%) expect to grow their spend there. I find it odd that Borrell did not ask with which media they expected to decrease their budgets…
When asked further how “online” budgets are expected to be spent, local advertisers shared that they would focus their marketing dollars primarily on their own website (72% of respondents). Also important to them is their email newsletter (52%) and their social media presence (40%). Display advertising, along with search, directory listings, classifieds and mobile advertising come in a second cluster which ranges between 16% and 26% of respondents. Online video (10%) isn’t a priority for local advertisers.
Of the local online media being bought by local businesses, 45% is done directly with local pure play websites. The rest is split relatively evenly among traditional media with their online presence, yet not rank any higher than 25% (online directories).
Borrell Associates indicated that 63% of local businesses maintain a social media presence: over 90% of them have a Facebook presence while only 30% are on Twitter. 35% of local businesses are not there yet. The average number of followers / friends / connections they have per social media account is 5,076 users. Although that number may be low, it resonates in importance with email ranking in second in importance for local businesses. The ability to speak to, promote to, directly with interested or loyal clients is much more powerful and worthwhile for local business than shooting in the dark.
Mobile as an ad platform is only now starting to pick up in the local market place. Only some attention is being paid to local advertisers by media players (traditional with mobile, or online pure plays with mobile combined), whereas they are more than willing to spend on mobile which resonates with them as a direct way to communicate with interested clients.