Convergence: Borrell Focuses On Local
June 4, 2010: Borrell Associates' Gordon Borrell was the first solo speaker on day two of Radio Ink's Convergence conference, with a look at local online revenue and radio's place in it. Borrell said, "Determining how much local advertisers spend now is really important, but really, really difficult." There's no "collection point," he said, no "building with call letters on it."
But now, he said, data has been collected for spending and sales in markets across the country; "We now can match up the spending with who's receiving it."
Borrell showed some figures for other media, saying newspapers will bounce back, but acknowledging, "Nobody believes this." It may be a "dead-cat bounce," he said, "but it is indeed a bounce." Yellow Pages, a $9 billion business, will drop 29 percent over the next five years, Borrell believes, with that money going to the Internet, and he sees even more dollars coming from the $20 billion direct mail industry, due to high rates, the likely end of Saturday delivery, and e-mail as a disruptor. In that arena, he predicts a 20 percent five-year decline.
And, Borrell said, the people who are making money now are not those who are trying to squeeze a few more dollars out of conventional radio advertisers. He said, "Follow he trend line on where advertisers are beginning to shift their dollars. Those dollars are easy to get."
Looking at radio websites, Borrell said local growth added up to 5 percent last year, and is at 15 percent this year, pacing for about $265 million. But that is still a minuscule part, he said, of local web advertising. He believes 30 percent of local online ad spending is "an achievable share" for radio sites, but it will take an investment to do it. Borrell said, "There's a tremendous power we have in radio to drive traffic," but radio must act "a little more aggressively."
As part of that, he supports the idea of online-only sellers. To generate a million in revenue overall, he said, a station will need four dedicated online sellers.