WILLIAMSBURG, VA (Sept. 6, 2012) – Borrell Associates has announced the formation of a new media industry geography called Digital Marketing Regions (DMRs), identifying 513 U.S. markets where local businesses concentrate their digital advertising expenditures. Local ad spending levels for any DMR – as well as for any U.S. county – can now be seen for free by visiting Borrell’s website.
DMRs range in size from Los Angeles, with an estimated $813 million being spent by local businesses this year, to Carlock, South Dakota, with $310,000. Although the average DMR includes six counties and has $36 million in locally spent digital advertising, the median DMR has $10.6 million in online ad spending. In one-third of the DMRs, local businesses are spending less than $5 million. Each of the nation’s 3,033 counties falls within one of the regions. The average DMR includes six counties.
“Digital media has been around for 20 years without its own unique market geography, so this is overdue,” said Kip Cassino, executive vice president at Borrell. “TV has its Designated Marketing Areas. Radio has its Arbitron markets. Other media use MSAs, CBSAs or a collection of counties to gauge business and consumer engagement. The DMR is uniquely for digital marketing, and especially for those trying to understand what’s happening locally.”
Local businesses in the U.S. will spend $18.7 billion on digital advertising this year, up 21% from 2011. Borrell issued a client memo earlier this week forecasting 30% growth in 2013, to $24.4 billion. By next year, for the first time in history, digital media will hold greatest share of local advertising budgets, knocking out the longtime leader, local newspapers. Digital media will control 25% the $96 billion local advertising marketplace, while newspapers will control the second-highest share at 18.6%.
Borrell developed the DMRs with the help of its client base of more than 1,100 local media companies. The regions were selected by a formula that identifies a core county where digital marketing expenditures to reach local consumers is high, then spans out to draw geographic boundaries where expenditures taper off or “hit a wall” from another market’s expenditures. For a deeper explanation of the methodology, visit the Borrell Associates website at www.borrellassociates.com.
The DMRs share interesting characteristics. Many are bounded by a river or a mountain range, indicating that easy access to stores is at least one part of the equation in drawing the lines. DMRs get larger in sparsely populated areas because shoppers in these rural areas must travel farther to shop than their urban cousins.
“The distance consumers are willing to drive to make certain purchases – to visit a shopping mall or buy a car, for example – is pivotal to the physical size of DMRs,” Cassino said. “These geographies become larger as the ratio of local online ad spending in the ‘core’ county to any surrounding county grows,” he said.
Borrell has posted an interactive map displaying each of the 513 DMRs, along with the counties included and the level of local online advertising in each market. It can be viewed at www.borrellassociates.com/dmr. Visitors to the site can also view online advertising for any U.S. market by county, by Core Business Statistical Area (CBSA), by Television Market Area (TMA), or by state.
Borrell is also offering a free webinar on Thursday, Sept. 13, to unveil the DMRs and answer questions. To sign up for the webinar, visit www.borrellassociates.com.
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