3-21-13
According to a new report by Borrell and Associates, advertisers are spending more money each year on promotions. That's good news for radio, an industry known for presenting great ideas to advertisers. The Borrell report says, "six years ago local businesses spent 10% more on advertising than they did on promotions. Last year, they spent 81% more on promotions. Even as local advertising bounces back at a rate of 8% this year, the $101 billion they?re likely to spend will still be 16 % less than what it was in in 2007. Meanwhile, local promotions is forecast to be 33% more than it was in 2007, reaching $176 billion this year.
And Borrell recommends something radio is very successful at executing. "One of the biggest opportunities might be helping local businesses develop and utilize customer loyalty programs. Promotions are designed to drive store traffic, but more importantly drive new customers into the store and cultivate them into higher-value loyal customers. Our research shows that local marketers are using promotions to develop larger and larger customer lists, but failing to do anything with those databases. Helping them develop an integrated promotions program, and following through with helping them manage their customer lists, would seem to be a very large opportunity indeed."
The Borrell report says, instead of carving it from traditional ad budgets, the money appears to be coming from things like slimmer profit margins (taken through steeper discounting), the salaries of former workers who used to handle marketing tasks, and from agency fees, printing budgets and postage.
You can read the Executive Summary of this new report HERE
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