Online Local Ads Forecast To Grow 37%, SMBs Increase Digital Spend

For the first time, online local advertising is on track to overtake all local analog media, this year. That's per a forecast from Borrell Associates, which expects digital to hog half of all local ad dollars in 2016.

On its own, online local advertising is on pace to grow by 36.9% -- outpacing last year’s growth rate of 34.9%.

Propelled by digital growth, the consultancy sees local advertising growing much faster in 2016 than many analysts assume.

“Most people put it in the low single digits,” Gordon Borrell, CEO of Borrell Associates, said on Thursday.We’re saying it’s 16.4%.”  

Fueling Borrell’s latest prediction are surveys showing that nearly 60% of small- to medium-sized business plan to increase digital advertising, this year. Also, more SMBs are pointing to social media as a lead-generation tool, Borrell finds.

To say that digital is drawing money from traditional media is too simple an equation, according to Borrell.  

“We believe that SMBs are actually increasing their ad budgets -- as evidenced by this year’s unusual growth forecast of 16.4% -- just to spruce up their online presence,” according to the media consultant’s latest report.

“Our SMB research shows that even the smallest of advertisers, which typically spend very little on any form of advertising, are finding at least some budget to buy into the digital game,” the report notes.

Borrell also believes that some SMB spending is erroneously marked as “advertising” when it is merely a technical task or marketing service. For instance, many SMBs consider what they spend on SEO or Web site design to be “advertising.”

 

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