Borrell's 2012 local advertising forecast

2011 Local Mobile Advertising Conference
October 3-4, 2011, Chicago Fairmont
Supporting Data
FromGordon Borrell’s
Opening Remarks

Background
The following forecast was provided by Gordon Borrell,
CEO of Borrell Associates, during the opening session of the
2011 Local Mobile Advertising Conference at the Chicago
Fairmont Hotel on Oct. 3, 2011.
To access the conference presentations, send an email
to conference@borrellassociates.com or call 757-221-6641.
To see a detailed local advertising forecast for any specific
U.S. market, visit www.adspending.com and sign up for
a free walkthrough.

Opening Statement
Our job at Borrell Associates has always been to boil the hype out of things – to see what makes money and what’s just hype. So I’m here to tell you that as we boil out the hype , it has become very difficult to not look “hypey” about this stuff. I will also tell you– and this might be a shock – that local mobile advertising is not quite “here.” But next year it will be.
When we take a look at the entire advertising landscape, this year there was $86 billion spent on local advertising, and less than 1% of that was in mobile advertising. So it’s a very small blip, but there are some very dramatic things that we have seen, and that sets the stage for something very significant, we believe, happening in 2012.

Local advertising this year is $86 billion. Next year we believe it’s going to increase to $90 billion dollars, or 4.9%. That looks like a healthy increase in local advertising. However, we’re facing the most expensive election in U.S. history, which is bolstering the numbers. If we took that it, there would be very tepid growth in local advertising next year. When you take a look at Local Online advertising, it goes from $14.8 billion this year to nearly $18 billion next year. That’s a 19.6% growth rate. Local Online advertising currently holds the second-highest share of any local media at 17.2%, bumping up against local newspapers’ 24.7% share. Next year it will approach 20% of all local advertising dollars. That’s an additional $2.9 billion growth next year for Local Online Advertising.

Opening Statement (continued)
The interesting thing is, that $2.9 billion growth in Local Online represents two-thirdsof all the growth next year in local advertising. So that’s where the vast majority of the growth will occur.
When we drill down to Local Mobile, we’re seeing about $788 million – so it’s not even a billion-dollar category yet. Next year, it goes up 103%, from $788 million to $1.6 billion. So I’m here to tell you that Local Mobile Advertising will really come of age in 2012. That’s the year we’re going to see a significant growth pattern among many, many local advertisers. Our surveys this year of more than 1,000 local SMBs indicate that 48% intend to engage in mobile marketing this year. Not all actually will – but it signifies their intent. We’ve never seen numbers like that before, and we think that when the economy improves next year, they’ll start acting on that intent.
What you’re seeing now is spotty. There are lot of anecdotal stories – many of them you’ll hear at this conference. Now here’s another amazing statistic from these numbers: If our predictions are correct, that additional $812 million that will be spent on Local Mobile Advertising will represent 28% of all the growth in Local Online Advertising. So this little tiny segment is quite big indeed when you view from that perspective.
I would say that Local Mobile Advertising is just arriving – or at least pulling into the station right now. And from all indications, it’s going to take off very quickly.

Supporting Data: 2011 Forecast

Supporting Data: 2011 Local Ad Shares

Supporting Data: 2012 Forecast

Supporting Data: Local Adv. 2011 vs. 2012

Borrell Associates Inc.
Local Market Data
If you’re interested in seeing advertising expenditure data for any U.S. market – including detailed online & mobile expenditures – visit www.adspending.com
or give us a call at 757-221-6641.

Borrell's 2012 local advertising forecast

by Borrell Associates on Oct 05, 2011

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Borrell’s 2012 local advertising forecast — Presentation Transcript

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