The Local Advertising Market Has Changed Faster Than Many Sales Teams Have

(5 minute read)

Local media companies now find it harder to close advertising deals. Gordon Borrell, CEO of Borrell Associates and an industry analyst, said the problem is not decreased business spending. Instead, he argues, the marketplace itself has quietly transformed.

In his view, the significant change is subtle for media companies. The real shift is the “composition of businesses in the marketplace” that buy advertising. What was once a retail-heavy local economy has moved toward service businesses, new businesses and digitally fluent marketers. These groups think very differently about where and how to spend money.

That change has made old sales habits less effective. Borrell argues that many advertisers now believe they can handle much of their marketing in-house, even if they do not fully understand the bigger picture. At the same time, local media sales teams still approach the market as if it were 2014. That creates a tougher sales environment, a more skeptical advertiser, and a wider gap between what media companies want to sell and what local businesses think they need.

A different kind of local advertiser

Borrell said the core shift begins with the kinds of businesses operating in local markets today. “It’s shifted from people that sell goods and services,” he said. Categories such as jewelry, shoes, clothing and furniture are now far easier to buy online than in the past. This weakens some traditional retail categories that long supported newspapers, television and radio. A different class of advertiser has grown in importance.

In their place, Borrell sees a more service-driven economy. It is now “more toward a services economy,” he said. These are businesses where people “actually have to show up and do something,” like fixing plumbing, roofing, landscaping, personal care or delivering healthcare. Such businesses still need advertising, but they often enter the market differently than the retailers who local media built their sales models around.

He said the pandemic accelerated that shift. “There’ve been a lot since the pandemic, 1.7 million net new businesses,” he said. He added there are probably “over four or five million that are new” when gross business formation is considered. Traditional media have a problem: These newer businesses “tend to buy targeted advertising and sit at the very low end of the funnel and buy Google keywords and targeted banners and things like that.” As Borrell put it simply, “Your sales reps don’t see them.”

That invisibility matters. The business opportunity remains, but it is no longer in the obvious places. Local media can no longer assume the companies most likely to buy are the same ones they've always called on.

Smarter marketers, narrower focus

Borrell believes buyer sophistication is another major change. He is careful not to overstate their expertise, but he notes their experience is much higher than before. “Can’t tell you how smart they are, but I can tell you the amount of experience they have,” he said. More businesses now have people inside whose full-time job is to manage marketing.

This has produced a dramatic reversal in the local media ecosystem. “Back in 2014, I believe it was, there were more advertising sales reps than internal marketing people at local companies,” Borrell said. Today, there are three times as many marketing people at these companies making decisions as there are ad sales reps. These marketers were hired to manage Facebook, Instagram, SEO and other digital tasks. Many are younger, digitally fluent, and comfortable running campaigns without outside help.

That does not mean they understand marketing broadly. Borrell said many operate in a narrow band, focused on quick-response tactics and bottom-funnel tools. “They can do a lot of it on their own,” he said. The danger is that they “live at the bottom of the funnel” and do “not do any type of branding or any other softening up of the market.” To explain the problem, he used an image: “It’s like there’s this giant freaking carnival and they’re all gathered at the gate saying, ‘You gotta come over here to the Tilt-A-Whirl.’” Nobody, he said, is advertising the carnival itself.

Here, Borrell sees a major blind spot: branding. Many marketers have mastered response tactics but have not learned how to build demand at the top of the funnel.

Why proof now beats reach

For media companies, that shift has made sales more difficult. It is no longer enough to pitch audience size, frequency, or broad market presence. Advertisers want something more immediate and measurable. Borrell said that is why local media must improve their education. “It’s education,” he said. Marketers today are deeply impatient. “If something doesn’t work within a week, they’re onto something else.”

Still, he insists that media companies should not abandon upper-funnel advertising. Instead, they need to explain it more clearly and demonstrate how it fits with the marketing mix. He pointed to research from the Radio Advertising Bureau showing how traditional media can lift the performance of digital campaigns. In his words, “branding media combined with what I keep calling a bottom of the funnel campaign where people are leaning forward, ready to buy something, increases total brand awareness, memory recall, total sales, and clicks.” He added, “It will significantly lift a digital campaign when you add traditional media.”

The challenge is persuading skeptical advertisers to test the idea. “They know you’re biased,” Borrell said. Sales reps have to be careful in how they approach the conversation. Instead of pitching immediately, they need to lead with evidence, fairness and genuine help. “Be their friend,” he said. “Help them in areas that you know aren’t going to completely immediately, directly benefit you.”

That philosophy leads to one of his clearest prescriptions for the industry. “I think the only role for a successful media company that wants to make sufficient money off advertising is to pay salaries that turn sales reps into trusted advisors who also sell. They should not be sellers that happen to be trusted advisors.” For Borrell, that is not a slogan. It is the core job now.

What local media should do next

If he were running a local media company today, Borrell says his first move would not be to redesign ad products or launch another sales initiative. It would be to better understand the market. “The first thing I would do would be to find out the composition of businesses in my market,” he said. Too many sales teams, in his view, still work off old assumptions and outdated prospecting habits. “Your sales reps don’t know who to call on,” he said. “They think they do, but they’re using the old obsolete eyes-and-ears method.”

That has to change. “Find out where the money is,” he said. The data often points to opportunities that local sellers do not expect. “There are so many businesses where no rep has ever knocked on the door, and they’re dying for one,” he said. But salespeople keep “going after the same ones again and again,” often because those categories once produced results. He even warned that some familiar categories may now be weaker bets than they appear. “Everybody’s going after HVAC,” he said, but “HVAC is cyclical,” and “we’re in the down period right now.”

For Borrell, none of this reduces the importance of journalism. But it does clarify the business challenge. “Content’s absolutely important,” he said. “You can have the greatest content in the world, but your business can still fail if you have no money to pay salaries.” That is why he keeps returning to the same point: the market and the buyer have changed, so the sales approach must change too.

Source: Editor Publishe