I’m still digesting the latest Borrell Associates report, “Online Promotions: The Big Shift,” but I think it’s safe to say that there are some surprising — and potentially controversial — predictions for local media. At the heart of the report is the forecast that online promotions — money that local companies spend to promote their own online initiatives, including public relations — “will nearly triple over the next five years to $22.8 billion, surpassing all other online advertising categories.” The report says “the inability of newspapers, magazines, radio and TV to prove return on advertising investment has led to a swing toward promotional spending.” As a result, Borrell predicts display ads and paid search in local markets will peak in the next year or two and begin a steady decline (while video continues to grow more share). The advice for TV stations? Create “marketing partnerships” with local companies to drive awareness/traffic to their online promotions. “Television may be the best legacy medium for driving traffic to an online promotion,” the report reads, which lists some examples, including contests and coupons.
I agree that online promotion spending will grow quickly over the next few years. And I also agree that the goal for TV stations’ sales units is not to sell advertising but to increase their clients’ sales, which begs more creative, customized marketing solutions. But I question that fact that paid search especially will decline as aggressively as Borrell suggests. Paid search has become a “must” investment for any online initiative — it’s tremendously effective (it can drive more traffic than a TV campaign) — and local advertisers are still learning how to use it (in fact, local media companies are increasingly “reselling” search in their ad packages).
Finally, this report shouldn’t create artificial confidence that local TV stations can create a bunch of contests and maximize online revenue going foward. Creating “marketing partnerships” goes well beyond a contest or two, and it will require a new approach to selling. And it doesn’t diminish the urgency for local stations to create innovative new products and partnerships to diversify their online revenue outside the standard TV website fare.