Local Advertising To Remain Mostly Flat In 2023
Economic pressure and turnover of local businesses during the past couple of years will significantly impact 2023 ad buying.Some media is forecast to grow double the average, but many will decline, according to data released by Borrell Research on Wednesday.
Borrell forecasts that local advertising will hit $120.7 billion this year and $121.5 billion in 2023, representing 0.6% growth. ]]
Ad spend for digital media such as search, display, and video is expected to grow 5.2% in 2023, while traditional forms of print, broadcast, outdoor and cable are collectively forecast to drop 6.5%. Broadcast TV will suffer the largest drop, declining by double digits, according to Borrell.
The forecast is fueled by the collapse of millions of businesses as a result of the pandemic and economic challenges in 2022, but also the creation of twice as many new, smaller businesses that are very different than the ones each replaced.
It turns out, the number of U.S. businesses with fewer than 10 employees nearly doubled, while the number of businesses with 25 or more employees declined since March 2020, Borrell found.
Some 6.2 million businesses categorized as “high-propensity,” those designated to be more likely to succeed and grow, were founded since 2019. Most have been in businesses with fewer than 10 employees, while the number of businesses with 25 or more employees has declined since the pandemic.
Borrell released the data Wednesday, the day Meta reported it would start to lay off 11,000 employees. Last week, Twitter laid off about 3,700 employees.
“Layoffs at Google, Facebook, or other national providers generally don’t affect local buyers, as their interactions in buying search engine marketing or social advertising is mostly via DIY platforms,” said Gordon Borrell, founder of Borrell Research. “The only issues would be related to technical problems that might go unsolved for longer periods.”
He says tnat Facebook, for instance, has been slow to approve boosted posts because of the need for manual review. If that timeframe gets longer, advertisers might just cancel.
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