Borrell: Radio’s Digital Ad Discovery Tempers ‘Tepid’ Growth


Based on activity in the first half of this year, Borrell Associates has readjusted several of its 2019 local advertising projections and, in turn, released its 2020 forecasts.

The biggest change is in the Addressable Digital Revenue — the amount of digital ad revenue available to local media companies in a market. “While that slice of the digital pie is growing, it’s not growing as fast as initially anticipated,” Borrell notes.

But, Borrell has a big positive statement to make about Radio.

The report lists Addressable Digital Revenue estimates for 511 U.S. markets for 2019 and 2020.

What is Addressable Digital Revenue? Broadcast media’s sales leaders better memorize the definition, as it could impact their annual bottom line in the quarters to come. “It’s the total amount of digital ad expenditures for all local businesses located in a market that can be captured by local media companies,” Gordon Borrell explains. “It ranges from about 2% of all digital advertising being spent in a market to as much as 24%.”

These, Borrell says, are important numbers that help media companies and ad agencies gauge what’s available in local markets after Google, Facebook, and other pure-plays take their big cut.

While the Addressable Digital Revenue segment is changing the most, there are three other big bullet points that are particularly noteworthy:

  • Radio has finally discovered the Internet, with a vengeance.
  • TV and cable are also gaining more ground in digital sales.
  • Newspapers and yellow pages are seeing digital revenue decline a bit more steeply.

Overall advertising forecasts for local advertising remain the same: Borrell forecasts “tepid growth” this year and next.

“For 2019, we expect local advertising to grow 1.4% over last year, reaching $128 billion,” Borrell notes. “For 2020, we’re forecasting growth of 1.3%, to $129.7 billion.”


For those not convinced that radio and audio are one, in the ears and eyes of marketers and consumers, Borrell’s ad trends for 2019 and 2020 indicate that audio media’s growth engine is revving a bit harder than TV — a fact seen in quarterly earnings reports indicating that retransmission consent fees are now eclipsing advertising revenue in non-political years.

As show below, radio’s forecast growth rates are higher than cable and TV and “other local media” in 2019 and in 2020. In 2020, that growth rate surges to 27%.

Meanwhile, cable is shrinking — a sign that cord-cutting is only worsening.

“TV” is rising, but not to the same extent as Radio.

Meanwhile, the continued downfall of the Yellow Pages may leave Navin R. Johnson one of the few individuals still excited about the arrival of new phone books.

Further, the decline in newspaper revenue — a long-term problem digital couldn’t solve, except at The Washington Post and The New York Times — isn’t about to change anytime soon.

It’s great news for radio, which has widened the gap between it and cable television. At the same time, radio and the Yellow Pages are forecast to be equal by ad revenue totals in 2020 — erasing a $1 billion gap seen in 2018.

Still, radio has a long way to go to catch TV, even with the medium’s slowing growth rate.

Meanwhile, the long-term woes suggest that TV will eclipse newspapers in digital ad revenue by 2022, if not sooner.