How Deep Is Facebook’s Local Ad Impact?



It’s no surprise that, when it comes to its advertising might, Facebook keeps getting bigger and bigger.

With a 7% slice of local advertising, growth expectations remain grand. If analyst predictions are correct, “the social media juggernaut will be taking more money out of local markets than newspapers, TV, or radio advertising.”

That’s one of the key takeaways from a new 17-page report from Borrell Associates that puts the spotlight on Facebook and its ad sales prowess aptly titled, “Gauging Facebook’s Impact On Local Advertising.”

As noted by Gordon Borrell, the principal author of the report, Facebook’s trajectory “seems to follow that of another marketplace disruptor, Google.”

But, Borrell’s research shows that Facebook actually just zoomed past Google – attaining 22% more U.S. ad revenue in its seventh year and on track to attain 29% more than Google in its upcoming eighth year, he says.

“Who’s spending those billions of dollars?  Millions of businesses at the local level,” he notes in the report’s Executive Summary. “They’re bigger – spending more than twice as much on advertising as those who don’t buy Facebook ads – and there are high concentrations of auto dealers, restaurants, and franchisees on board.”

That’s fighting words for radio, as the Automotive and Quick-Service Restaurant (QSR) categories are traditional hotbeds of local advertising for AM and FM stations. Likewise, auto dealers are a lifeblood for many local TV stations.

Should broadcasters be gearing up for battle? Not so fast, says Borrell.

“Who’s impacted the most?,” he asks. “The surprise answer is other digital media. While print and broadcast media budgets are certainly targets, the sheer size of digital budgets have made them the biggest target for increased buying of Facebook ads and boosted posts.”

The report details Borrell’s findings from a survey of 7,564 local advertisers, including 4,697 local businesses that are buying ads on Facebook.  The report also attempts to gauge the impact on local markets by offering estimates on Facebook advertising expenditures for 513 U.S. Digital Marketing Regions (DMRs), where the smallest of markets are seeing slightly more than $100,000 being spent and the largest – New York City – is seeing more than $500 million.

The study also includes sections on how broadcast and print allocate digital dollars, what the average print and broadcast advertiser spend on digital, and the likely target of Facebook funds.

Borrell’s release of the Facebook study is tied to the addition of the panel “Leveraging the Facebook Opportunity” set for the 8th Annual Local Online Advertising Conference, set for March 6-7 at the Grand Hyatt in New York. Panelists include Vince Benedetto, who heads Bold Gold Media Group of Scranton, Pa.; Scripps’ Tom Sly; and Tribune Media’s Steve Baron.