The average small and medium-sized business spent $18,100 on broadcast radio in 2024 according to a survey of local ad buyers by Borrell Associates. It says a third of the businesses bought ads on AM/FM this year. That is three times the 11% that report they spent money advertising on streaming audio services where the average budget was $15,000.
Radio stations also likely got a piece of what Borrell’s annual survey finds was the most-used marketing element. It says a majority of 56% of small and medium-sized businesses allocated dollars toward events and sponsorships. The average investment was $17,700. Borrell says 54% of the local advertisers surveyed used social media to reach their customers.
The medium that had the biggest average budget was out-of-home and outdoor advertising, where the average budget totaled $54,400. The cost may be why fewer than one in five local businesses said they bought outdoor ads this year. Other ad options that had sizable budgets included streaming video, with a $44,600 average, and likely pulled dollars away from broadcast television. Even so, more local advertisers said they used more broadcast TV than streaming video—but only by a four-point difference. Another eye-opener may be the number of local advertisers still investing in print. Borrell’s survey finds that 38% spent on magazine advertising this year, while 35% spent on newspapers.
“The real surprise is a pattern that shows the cheapest or less expensive forms of advertising don't necessarily appeal to large groups of advertisers,” says Ben Bouslog, VP of Business Development at Adcellerant. “In fact, most of them—printed directories, online directories, and text-based marketing—appear toward the bottom of the list in terms of popularity. The good news is that advertisers are willing to invest large amounts of money in advertising that they perceive works.”
In a video reviewing the Borrell findings, Bouslog says it appears outdoor, and video commercials have mastered advertisers’ need for top-of-the-funnel advertising, where branding is usually employed, while search engine marketing has mastered the bottom-of-the-funnel, where consumers typically initiate the more serious path to purchase.
“Being the low-cost leader isn't always the road to success for an agency or media company,” Bouslog says. “It points to the need for sellers to educate their buyers about both the mix and the cost of advertising, and of course, the need to see this as an investment and not an expense.”
If radio wants to increase its share of the local ad market, the Borrell survey points to a need to make a stronger case to buyers of its effectiveness. One in three local businesses says they bought radio in 2024, and the same number also rate AM/FM as either “extremely” or “very” effective. Among the 11% that used streaming audio ads, 18% of local buyers gave it high marks for effectiveness.
“One often-forgotten form of marketing appears fairly high in both usage and effectiveness is events and sponsorships,” Bouslog says. “That may reflect local businesses’ desire to complement their virtual marketing with the need to get out and meet real people.”
Overall, the Borrell survey finds search engine marketing ranks first for effectiveness in the eyes of local ad buyers, followed by social media. Bouslog points out that direct mail also ranks surprisingly high.
“I think the attribution capabilities these platforms tend to have a direct correlation to the weight of their effectiveness,” Bouslog says. “It all points to the opportunity to create a varied mix of marketing techniques for your advertisers, culling from a list of those most effective forms to create a powerful, effective marketing campaign.”
Borrell’s survey finds 36% of local businesses say radio sales reps are seen as sporting more marketing know-how. The bad news: The numbers have fallen in the past few years. In the 2021 survey, radio was at 41% which Borrell blames on a growing lack of confidence across all media when it comes to whether sales reps have digital expertise.
The findings are based on Borrell’s fall 2024 survey, which canvassed 1,130 direct ad buyers and 122 local ad agencies.