Advertisers are constantly on the lookout for trends that affect their industry and consumers. For instance, it's always a good idea to keep a pulse on how industry peers and competitors use their ad spend to get an idea of which marketing channels could yield the highest ROI. Additionally, staying abreast of the latest trends can help company leaders budget and plan for the coming year.
With that in mind, one key question comes to mind for many businesses: Where are local ad buyers spending their dollars?
Borrell's Local Ad Buyer Study
Borrell Associates, Inc. is a well-known marketing intelligence firm specializing in tracking, analyzing, and forecasting what local businesses in the U.S. spend on advertising and marketing. In the spring of 2022, Borrell surveyed 1,881 participants to determine how local ad buyers allocate their marketing budget.
Some key advertising spend by medium takeaways from the survey include the following:
- Ad buyers place a high value on "owned media" — that is, they have complete control over marketing channels.
- Social media, search engine marketing (SEM), and over the top (OTT)/streaming video are at the top of the list for channels that have seen increased advertising spending.
- Due to the pandemic, ad buyers are most likely to prefer having control over their advertising.
Let's dive into some of the specifics of the survey in more detail.
Social Media Sees the Biggest Increase in Ad Spend
It's perhaps not shocking that 27% of the participants in Borrell's survey are increasing spend on social media, as opposed to only 5% reducing spending. After all, the amount of time adults spend on social media platforms is at an all-time high: about 95 minutes per day, according to one study.
Social media users tend to trust other users as their "preferred" form of influencer and are much more likely to buy a product based on their recommendation vs. that of a celebrity (37% vs. 7%). Spending more on social media helps businesses generate more trust amongst their consumers while reaching them on a channel they use daily.
Search Engine Marketing is a Close Second for Highest Ad Spend
Right behind social media, SEM accounts for the next-highest increase in ad spend according to Borrell's survey results: 25% of respondents are increasing their SEM ad spend, vs. only 3% planning to reduce it.
There are apparent reasons why local ad buyers would want to invest in SEM channels. For example, local queries make up almost half of Google's two trillion searches per year; a whopping 64% of consumers use Google My Business (GMB) to find key business info, like addresses or phone numbers. Businesses that invest in SEM can tap into a diverse and profitable demographic that they simply wouldn't be able to access otherwise.
Ad Buyers Want to Increase Spending on OTT, Event Marketing, and Banner Ads
Borrell's survey uncovered other interesting trends regarding where buyers spend their advertising dollars.
For example:
- Spending on event marketing is in third place for budgetary increases, with 18% of buyers wanting to either start investing in this medium or allocate more resources to their existing strategy. This trend is likely a result of the pandemic's effects — after years of relative isolation, people are eager to attend more events and participate in more social activities.
- 16% of respondents said they want to start or increase spending on banner ads. This trend could be because more people are online than ever before and for extended periods. In addition, consumers' online shopping habits continue to change, and many may be paying more attention to banner ads than they did previously.
- Finally, OTT marketing is another focus area for ad buyers, with 15% wanting to spend more on this channel. Again, this is no surprise, especially with well over three billion OTT users in the global market — and OTT's popularity rising with each passing day.
Keep Track of the Latest Trends, and Take Action!
In summary, local ad buyers are especially interested in increasing their spending on the following:
- Social media
- SEM
- Event marketing
- Banner ads
- OTT
Knowing this can help you to make the best marketing decisions for your business as your team plans out the upcoming year and looks for ways to maximize ROI. If predicting an advertising forecast, media planning, ad buying, and other key marketing operations aren’t in your wheelhouse, you’ll want to turn to a trusted partner. Reach out to our team of professionals at CoxNext today to learn how we can help you maximize your ROI while minimizing your ad spend.
