Local Advertising Hits A Tipping Point

“(W)e’ve reached the end of the Golden Age of Advertising,” says pioneering media researcher Gordon Borrell in a new report that paints a very realistic picture of the state of local advertising. This report — Local Advertising Hits A Tipping Point — is a 5-year follow-up to a report published in 2010 and tracks the opinions of 7,228 small and mid-size advertisers (SMBs).

While there is a lot of between-the-lines conclusions to be drawn, here are just a few of the report’s findings. Remember, these are advertisers speaking, or it would be more appropriate to call them “the people formerly known as the advertisers.”

  • 82% of SMBs have established their own media channel in the form of a website or social media page.
  • Since 2007, spending has skyrocketed to the point at which businesses last year spent 72% more on marketing services and promotions than they had spent 10 years earlier. Meanwhile, the annual expenditure on local advertising was 22% less than it was a decade ago.
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  • 72% of those are purchasing digital services to support those channels, spending far more on those efforts than on basic advertising.
  • By examining IRS tax records, Borrell concludes that “if businesses were devoting the same percentage of this year’s gross revenues to advertising as they were 10 years ago, the advertising economy would be $56 billion richer.”
  • Online media appeals to the largest percentage of local advertisers and takes the largest share of ad budgets of any other media. This is a pedestal newspapers have occupied for over 300 years! “Over the next 12 months, the gap will almost certainly widen to the point that all traditional advertising channels — print, broadcast, outdoor and mail — begin to look like niche support mechanisms to a local businesses’ digital marketing plan.”Screen Shot 2015-06-10 at 12.33.49 PM
  • Traditional media has devolved into an option, selected by habit or by preference but certainly not by necessity.
  • Online is so strong that by 2020, Borrell projects that all traditional media will scramble to maintain a small set of advertisers who will spend small shares of their budgets with them.
  • Local businesses, on average, get 20% of their sales from online, versus 13% by the old standby, the telephone.
  • These businesses have just begun to become digitally savvy, according to a new metric from Borrell. 85% of SMBs fell short of a line considered “very active” in digital activity. What this means is that they are novices that somebody can teach and that the more savvy they become, the more disruptive they’ll likely be.
  • 82% of respondents maintain a social media page with an average of 2,123 followers, though 61% have fewer than 1,000. The report notes that growing their own audience base equates to real customers for SMBs, which is radically different than buying ads based on somebody else’s reach.
  • Native advertising (a.k.a. Content Marketing) is another area of satisfaction for SMBs, although its use is low. This equates to a growth opportunity for those providing a service.
  • Mobile is another BIG area of interest, although not in any traditional advertising sense. The projected spending categories for mobile relate almost entirely to SMBs own web franchises and include things like Responsive Design (mobile-friendly), search, SMS, proximity, apps and video.

With all Borrell research, it’s useful to take a step back and try to get a 30,000 foot view. What this report doesn’t say directly is that the levers of commerce in our world are shifting to the hands of businesses themselves due to the growth and development of a networked culture. The beauty (or evil, depending on your perspective) of the network is that it is a 3-way communications medium, which allows human beings to by-pass filters that the network deems inefficient and, frankly, now useless. This includes our entire cultural infrastructure of expertise divided into silos, the first of which is how we communicate. There will be others.

This Borrell report tracks empirically the shifts relating to the way money changes hands in the levers that grease of the skids used by businesses to reach customers and sell their wares. Those businesses are loudly telling us now — along with their customers — exactly how THEY want things done, and clearly that doesn’t include traditional forms of getting the word out. It’s too expensive. It’s too haphazard. It’s out of control in ways that we tend to disregard in the name of profit.

While I certainly respect the crisis that journalism may face in all of this, we’ve been our own worst enemies in the assumption that we could simply shift our model to the Web. It’s too late to effect any significant change in that strategic blunder, but it’s not too late to shift our focus to what we’re being given and away from what we want. That, I’m afraid, is the only logical path for the days, weeks, months and years ahead.

Meanwhile, Gordon Borrell will continue to apply his fascinating research to helping us understanding not only what’s going on today but also where that’s all headed.

The lesson of Bill Simmons and ESPN

bs_report_300The always astute James Andrew Miller, writing for Vanity Fair, makes an important observation for all media in his “Inside the Shocking, Abrupt Divorce of Bill Simmons and ESPN.”

In the end, one could say with minimal originality, but considerable accuracy, that Bill Simmons simply flew too close to the sun. He miscalculated how much value ESPN put on him and on his unique abilities and talents. He might also have forgotten a cardinal company rule that remains sacred whether it’s ESPN’s Old Guard talking or its new one: Nobody, but nobody, can be bigger than those four initials.

On the other hand, it could be said that Bristol forgot a kind of cardinal rule itself: In an era where fans can get not just scores but highlights, and a ton more, on their smart phones, distinctive and original content is the way to engage and hold onto an audience plopped in front of big 99-inch screens. That content often comes with a big price tag—and with a requirement that the people with unique abilities and talent who create it be treated like the stars you’ve paid for.

In a world of mass media, the single brand of the company rides atop every other marketing concern. This is a core Madison Avenue concept and the truth behind Miller’s statement that “nobody can be bigger than those four initials (ESPN).” In the next paragraph, however, he describes the truth of Jay Rosen’s The Great Horizontal, which is the newer and greater reality of today and, especially, tomorrow.

So allow me to restate what I believe is obvious. Media is increasingly about personal brands, because those are what’s permitted in the revolutionary conversation taking place among the people formerly known as the audience (another Rosen witticism). Even where brands are able to “act” like people, they are not, and this is the harsh reality of doing commerce in the age of the consumer. Harvard’s brilliant Umair Haque noted long ago that companies should be spending money on products instead of marketing, and his justification was this very thing.

This is why I encourage students and people already in the media industries to expend the energy necessary to create and maintain their personal brands. In the end, it’s the only thing that really matters in a networked world, where exchanges of knowledge and information occur at the personal level. The age of slick marketing is drawing to a close. You won’t be able to buy your way into anything downstream, because the process for doing such is slowly disintegrating. In 15 years of trying, Madison Avenue has returned to an old stand-by — one that empowered consumers have already dismissed — the pop-up ad. It’s truly amazing that, just like The Odd Couple, this tired old irritant is back with a vengeance. How true is the old saw that if your only tool is a hammer, every problem looks like a nail.

Commerce in the Great Horizontal will require great products and services and people willing and able to pass them around. There’s already the idea that “influencers” at the personal level are what product manufacturers need to buy, but that’s merely wishful thinking from the hammer known as Madison Avenue. I don’t have a map with the route from here to there charted, but the laws of attraction will be more useful than the laws of promotion.

Thou shalt not bear false witness!

People wonder why I come off as angry, especially a certain crowd on Facebook. Well, let me be blunt. The world is so swimming in the muck of lies and distortion that we’re all drowning in our own bullshit. If you dare, take a look at this. It was posted on Facebook by a prominent Christian author, speaker and radio show host, Dr. Michael Brown. As of this writing, it’s been shared by over 2,100 fans. The comments are a long stream of attaboys, backslapping, and “thank you for the truth” accolades. The problem is it’s all crap.

fakemuslimwomen

The problem here is that this isn’t a photo of some random gathering of Muslim women! Who knew, right? I mean, it fits the message so beautifully that I’m surprised Bill Maher hasn’t used it already. I did a Tineye search of that image and discovered that the copyright is owned by a photographer named Scott Nelson, who writes this in his description:

BAGHDAD,IRAQ-APRIL 03: Female members of the al-Mehdi Army march in Military formation during an April 03, 2004 military parade through the streets of the Sadr City neighborhood in east Baghdad, Iraq. The Al-Mehdi Army is a Shia militia aligned with controversial Shia cleric Moqtada Sadr, and the parade was meant to be a show of force in tandem with Sadr supporters’ continued protest against the occupation of Iraq by the U.S. lead coalition forces.

Wait, what? Their faces are covered for good reason? This was a Shi’a (Iranian roots) militia marching in a public parade in Baghdad after we took over their country. In his keywords, Nelson used military and war terms and was careful not to use the word “burka,” Muslim women, oppression,or anything else inflammatory. It is in no way representative of women without political rights. It’s a con job and one that is designed to inspire fear.

Yet the picture has been used in the Dr. Michael Brown context 80 times since. His clever poster is just the latest.

And so I ask, where is journalism in any of this? Why is Snopes the only website dedicated to sniffing out these frauds? Culture is being torn apart by lies, and our only worry is who’s going to pay for “journalism” in the future.

Shame on us!

We could solve this

President Obama on Baltimore:

“…if our society really wanted to solve the problem, we could.  It’s just it would require everybody saying this is important, this is significant — and that we don’t just pay attention to these communities when a CVS burns, and we don’t just pay attention when a young man gets shot or has his spine snapped.  We’re paying attention all the time because we consider those kids our kids, and we think they’re important.”

Jeremiah to the unrighteous King Shallum (son of Josiah, a righteous king) in prophesying the end of his reign: “Your father, Josiah, also had plenty to eat and drink. But he was just and right in all his dealings. That is why God blessed him. He gave justice and help to the poor and needy, and everything went well for him. Isn’t that what it means to know me?” says the LORD.

Enough is enough, saith the people

horizontalHere is the latest in my ongoing series of essays, Local Media in a Postmodern World:

Humanity’s Greatest Challenge

In discussing what’s happening to traditional media — including at the local level — we need to understand how the culture around us is influencing its disruption. It is culture, not technology, that is fueling institutional disruption in the 21st Century, and it’s going to continue for a very long time. The bottom of culture is rising up to challenge the underpinnings of the ruling class, led by a simple tool of the postmodernist, deconstruction.

Pro Journalism’s Erroneous Assumption

By now you’ve probably heard the story of two recent Pulitzer Prize winners who had already left “the industry” for jobs in either public relations or academia. The story brought out the usual suspects saying the usual things about how that damned Internet has robbed the newspaper industry, the result being a great loss to citizens of the U.S.A. The latest is from the Washington Post: Why the PR industry is sucking up Pulitzer winners.

FT_Salary_GapThe piece says it’s all about money and displays a PEW graphic showing the disparity between journalists and PR. Then, it drifts into the cause, which author Jim Tankersley describes as “a free rider problem – if no one pays, eventually the service shuts down – and it’s a different sort of economic disruption that (sic) the ones cause (sic) by other American industries that have shriveled or disappeared or migrated in recent decades.”

When, for example, a corner grocery in Michigan is driven out of business by a big chain based in Arkansas, the people in Michigan still have somewhere to shop. If regional news outlets die, who will dig up corruption by their local lawmakers? Start-up news organizations across the country are trying, but they’re largely struggling to find a for-profit model that works.

It’s fair to ask, in the midst of this, how smaller newsrooms still do so much valuable journalism — and whether they should. As newsrooms shrink, the sort of deep project reporting that often wins Pulitzers has become “harder to justify economically,” Bhatia (former Oregonian editor, Peter Bhatia) said. But it must continue, he added, for business reasons, not just accolades: “It reminds the community of the essential role that ‘traditional media’ plays where people live.”

And there we have it, the sob story of how valuable “the old way” was and is to communities. This is not a fact, at least not anymore; it’s an assumption that is not supported by current data. Public trust in “the press” is at an all-time low. Only 1 in 5 people tell Gallup that they have any trust in the press whatsoever. So all this tearful nonsense about Pulitzers and “shoe leather” and “holding the powerful accountable” is just hyperbole used to defend the indefensible.

Moreover, PR today is another changing animal. Businesses and industries are learning that the best way to get THEIR stories out is through real stories. This is due to the growing education of the public through experience provided by life in a networked world. Attraction, not promotion, is the new paradigm, and this requires people who can write beautiful stories, not “cover” blood and guts.

As Lisa Williams wrote in 2008, journalism will survive the death of its institutions. Professional journalists, however, likely won’t be a part of it, unless they can step off this relentlessly drum-beating high horse.