local media insider

How to use Borrell Associates reports

Our editors take a look at what market research is good for

Alisa Cromer
Using the data: Redwing Publishing looks at the big picture using Borrell Associates reports (click to enlarge)
Another view: The addressable opportunity is more than just digital advertising.
Narrowing it down to the services RedWing could be selling.
From "awakening" to the opportunity to the launch of the agency: 18 months (click to enlarge)
A fish is born (cick to enlarge)
A host of media technology helps serve the new markets.

Most media know that Borrell Associates publishes big picture industry research and produces an important media conference. 

But what do media get from this research?

LMI researchers delved into the reports to find the core practical uses and help you answer the question, does your company need this? And if so, how to put it to best use.

1.  Measuring the big picture:  Total market opportunity

A proverbial "6,000 foot view" is a constant subject among media executives as spending on traditional advertising drops year after year, followed by lay-offs.

Ironically, the hardest hit media companies have been the first to plunge into emerging markets for digital advertising, promotions and services. Smaller media have been able to stave off the trends via better organization of sales or shifting market share around.

However, sooner or later the declines  - sometimes large account by large account and sometimes franchise by franchise  -  wreak havoc on the unprepared, who fall further and further behind in expertise, while the dollars are, apparently, holding up.

So the hunt for new products and markets is on - and understanding market size, whether it's $3 million or $30 million or $300 million, is critical.

Part of the problem is that there is really no good way to dip a toe in the water and "make money from day one."  Digital revenue opportunities are so large and culturally differentiated from the norm that they require an "all in approach" - sometimes with separate teams and additional staff. 

Media companies have created whole divisions that behave like start-ups, requiring investment in management, training, sales and technical horsepower.

And that means better information about where the dollars are - and will be.

Enter Borrell Associates: Borrell's Compass Reports provide deep market data on any U.S. county. Some of the top level data is free, so use this link to find out total spend on large sectors.

As an example, RedWing Publishing, run by CEO Mark Poss, used Borrell's data for 18 different spending categories within the realm of "local online marketing" to grasp the big picture of available revenues in his market before launching a digital agency.

He shared his experience via slides at a Digital Agency Summit; note how his thinking from "awakening" to the launch of Big Fish Digital 18 months later was shaped by Borrell's data on his market:

  • 2. The addressable opportunity

    Since there are so many different kinds of digital services (hosting, SEO, Social Management, Agency Fees, Email management, etc.) to consider,   RedWing identified the largest categories, based on the reseach, to find the "addressable opportunity" - about $60 million:  

"If you are leaving out big chunks of the market you are leaving out revenues. The reports create an apples to apples comparison for every market in the U.S," said Poss. 

And a business was launched! See the case study here. 

Then the media was able to launch its agency around services whose opportunity had already been measured:

3.  Benchmarking  revenue performance

While overall big picture research is what Borrell is best known for, as important a use of Borrell data is for benchmarking. That is, given the size opportunity, the data shows the actual high and low ranges in each revenue stream that have been obtained by other companies.

Benchmarking helps media set a more realistic gauge of the market opportunity figure - and measure how well they are doing compared to similar companies. So down the line, for example, Big Fish Media could tell whether they were at the top of the field for media their size in selling, say, email or social media, doing ok, or trailing the lot.

Benchmarketing can also help set targets; if top performers only get 30% of a $30 million opportunity, media companies may want to aim for that.

"Understanding share is critical, both seeing the low end and what revenues can be," said Jim Brown, vice president of sales for Borrell Associates.

This is especially important to conversations around whether digital revenues will ever be able to replace print dollars, and are worth investing in at all. 

4. Identifying strategic best practiices

An interesting side benefit of Borrell's research is their ability to create Scattergrams from data, see who come to the top, and then interview the winners to see what they are doing that separates them from the losers.

Interviews with top-performing clients find best practices, which are often at the organizational and strategic level rather than incremental and tactical. Borrell shares best practices with their consulting clients. This is the "soft knowledge" that goes along with consulting relationships, Brown said.

5. Indentifying shifts in spending in key merchant categories

Key spending shifts  identified by category can also be used to create specific  sales strategies. In fact, our favorite reports are ones showing spending shifts (see slide two in the attached PowerPoint). Categories that are shifting major dollars out of, say, cable or the yellow pages, into digital, should be key targets for newspapers selling digital products. Or vice versa.

Brown says the reports help show "who to call on and what to talk about."

How does this work? First the reports break out 100 business categories, to see which are increasing online and where dollars are shifting to and from for each category. 

The tool allows media companies to analyze categories to find out, for example, which are shifting the most dollars out of the Yellow Pages, direct mail, or other competitive media.

Included are key shifts such as this year's dramatic shift in spending by the furniture category from newspaper and direct mail to online. The reports show further how much companies are spending in paid search, on-line video, email marketing. 

There is an extra in-depth focus for key categories of Auto and Real Estate and recruitment. The basic breakdown looks at marketing as a three-legged stool; advertising, promotions, and digital marketing services. But these vertical categories are analyzed more fully. 

"Far too often sales management leaves it up to the sales representatives to decide who to call on. Consequently they call on people they know or met at the Chamber. It's not terribly strategic or purposeful,"  Brown said. 

Instead, he recommends targeting calls based on shifts occurring in the category. For example, if heating and air conditioning companies spent 75% of their ad dollars in yellow pages in 2013, but research shows that by 2015 it would be only 50%, that should be a clue to hone in on that category with a digital product that serves a similar purpose – reaching wallet ready consumer in “search” for a HVAC provider.

"It brings a sense of credibility to the conversation when you are in a position to talk about what is happening with advertising spending locally among you customer’s competition.” 

Brown suggested that media companies look further than the obvious suspects.  Chances are that most media companies only skim the surface and call on the largest companies in a category. But when it comes to selling digital advertising and services, a long tale approach may yield far better results. 

"Shifts in marketing expenditures may be pretty much invisible to broadcast or print sellers because much of the spending is only in digital services” Brown said. These expenditures are a very real piece of the market puzzle and they often represent a significant piece of the marketing budget.

In addition B2B customers who may be off the radar of your traditional media sales team, could be great prospect for digital services.

6. Knowing what to talk about on the call

The onslaught of digital agency sellers means that "getting in the door" often requires bringing real information that clients need to see.

"Our data is really critical. Instead of an 'our great stuff than can help you' approach, or that 'our ctr's are through the roof' sales reps can take a more educational approach:

"'Our company subscribes to a lot of research and we can show you how much is being spent on advertising (by your category and in this market) and where it's shifting to in the next couple years. Is that something you are interested in seeing?’ They are all interested in that conversation," Brown said.

Borrell’s data helps match up the number of employees at a company with advertising spending to create data about how much "other companies of a similar size" are and will be spending in which categories.

Spending varies by category and by market, so attorneys will spend differently than air conditioning services, and differently in Clearwater versus San Jose.

"The tool shows you how to (look at) that, simply by inputting the category and market to find the probable spend," Brown said.

On the actual call, the reps can show this data to the customer and ask whether their own spend is higher or lower, and how far off it is. 

"How does this compare, and why is that?"  questions open  another conversation. "And do you plan to do more or less?" Brown added.

Our take:  Borrell Associates Compass Reports are not inexpensive. A benchmarking report can run $2500, while some companies are spending $12,000 a year for additional data in a single market. The key use is strategic, more than tactical, so select products based on the current needs  - whether you are just starting to plan and need the big picture view to inform product selection - or well into digital sales and looking to create a more strategic sales plan.

However, with a little training around, for example, categories shifting revenues, the sales staff can use the reports for a tactical advantage in the field - a more intelligent approach informed by industry trends and research helps differentiate your team.   See also Top Eight Ways to Use Borrell Data in the Sales Department.

All in all, It's a good time to invest, when revenues are relatively stable as they are at many newspapers and television stations in 2014, and one sizeable campaign in a new category can make up for the cost.

The cost of not making informed reinvestment in the company long term, is far greater and much more serious.  

The author, Alisa Cromer is publisher of a variety of online media, including LocalMediaInsider and  MediaExecsTech,  developed while on a fellowship with the Reynolds Journalism Institute and which has evolved into a leading marketing company for media technology start-ups. In 2017 she founded Worldstir.com, an online magazine,  to showcases perspectives from around the  world on new topic each month, translated from and to the top five languages in the world.


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