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Gauging Facebook's Impact on Local Advertising

Date: March 02, 2017

Summary:

Facebook has burst so quickly onto the media world that its sweeping impact on local advertising has been easy to overlook. Borrell's 23-page report sizes up the damage, comparing it to Google's romp in the mid-2000s but showing that Facebook actually may have more steam. 

Body:

Carving a 7% slice of local advertising, Facebook is big and getting bigger. If it meets analysts’ growth expectations this year, the social media juggernaut will be taking more money out of local markets than newspapers, TV, or radio advertising. Our report gauges just how big of a crater Facebook is making in local markets. Its trajectory seems to follow that of another marketplace disruptor, Google. But our research shows that it’s actually just zoomed past Google, attaining 22% more U.S. ad revenue in its seventh year and on track to attain 29% more than Google in its upcoming eighth year. Who’s spending those billions of dollars? Millions of businesses at the local level. They’re bigger – spending more than twice as much on advertising as those who don’t buy Facebook ads – and there are high concentrations of auto dealers, restaurants, and franchisees on board. Who’s impacted the most? The surprise answer: Other digital media. While print and broadcast media budgets are certainly targets, the sheer size of digital budgets have made them the biggest target for increased buying of Facebook ads and boosted posts. This report details our findings from a survey of 7,564 local advertisers, including 4,697 local businesses that are buying ads on Facebook. It also attempts to gauge the impact on local markets by offering estimates on Facebook advertising expenditures for 513 U.S. Digital Marketing Regions (DMRs), where the smallest of markets are seeing slightly more than $100,000 being spent and the largest – New York City – seeing more than a half-billion dollars.


To download the full report, click here. 

 

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