A dramatic change in the creation of new businesses since the pandemic will forge a different advertising landscape across local markets in 2023, according to Borrell Associates.
Borrell forecasts local advertising to rise by only 0.6% in 2023. All growth will be in digital forms of ad spending, while traditional forms such as print and broadcast will decline by 6.5%. Local broadcast TV advertising is expected to see the biggest hit, declining by double digits.
The fluctuations are fueled not only by the collapse of millions of businesses due to the pandemic and by this year’s economic challenges, but also to the creation of twice as many new, smaller businesses that are quite different than the ones they replaced.
In preparing its forecasts, Borrell found 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.
“Because bigger businesses spend more on advertising,” said Corey Elliott, EVP of Local Market Intelligence for Borrel, “and smaller ones spend less, this poses challenges to media companies. It also creates a situation where many of these new entrants are invisible because, as they begin operations, they tend to not spend much money on advertising, or spend most of it on things like search advertising or other forms of digital advertising."
Borrell will unveil its forecasts and describe the change in business composition during a 45-minute webinar at 11 a.m. Eastern on Thursday, Nov. 17. The webinar is free. Register here, or visit http://www.borrellassociates.com for more information.
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