April is one of my favorite months. As we emerge from the cold of Winter, I find an extra spring in my step filled with hope, anticipation and wonder. This year, as we close the first quarter, I think it’s a ripe time to take a look around to see how things are going and where they are headed.
For me, I’m off to the NAB Show later this month. I’m excited to be speaking on two panels – one focused on small/medium radio and the other focused on the economic outlook for TV and Radio companies. As I have been preparing for these discussions my anticipation has been growing tremendously.
Candidly, the economic outlook for 2024 is cloudy. Our recently updated forecast reflected this uncertainty by decreasing expectations about 2% overall for 2024 compared to previous estimates. And we have talked about many of the factors affecting our economy right here in this blog: uncertainty about the upcoming election, growing inflation, stubbornly high-interest rates, etc.
But one thing that has been changing since the end of 2023 and continues now is that consumers are slowing their spending. While they remain optimistic about the economy overall, we are seeing changes in behaviors, which is an opportunity for savvy marketers.
One example is Quick Service Restaurants. We are forecasting $5B will be spent on QSR Advertising in 2024, up from $4.7B in 2023. That’s up over 6%, which is great news. But, what’s even better than that is where this growth is coming from.
For the most part, people are loyal to their favorite QSR and they do not change their habits or behaviors often. QSR marketers know this and depend on the loyalty of their base for the majority of their revenues. But, with inflation running rampant the last few years, prices at many QSRs have gone up significantly and consumers are finally feeling the pinch to such an extent that they are willing to shop around and change their loyalties.
This situation creates a massive opportunity, and we are seeing a large increase in QSR advertising related to deals and savings looking to bring in new customers previously unwilling to even consider making a change in brand.
So, on the surface, we might first look at this and see that consumers are spending less and not going out to eat as often and assume advertising related to this sector is in bad shape. But that couldn’t be further from the truth.
The change in consumer behavior and the willingness to change affinities means that marketers should be looking at their messaging and making sure they are doing two things: retain that loyal base (remember, they are likely shopping around for a better deal!) and attract your competitors’ customers that are unhappy right now. For the first time in a long time there is a path to significantly growing a restaurants’ clientele right now and I believe local media is poised to help accomplish these small business growth goals.
I’m also looking forward to seeing all the new technologies at the NAB Show. I can’t wait to be amazed by the ways in which AI is being used and integrated into our lives. I think about CTV/OTT and how relatively new this technology is which makes me wonder what the next big thing will be that might be in its infancy now but will change the way we look at advertising within the next two years. I promise, if I see it while I’m out there, I’ll report on it next month.
Plus, when I return, my colleagues, Rick Ducey and Christina Hurley, and I will do a podcast with our takeaways from the NAB. We will keep you posted when that publishes on our Leading Local Insights Podcast.
And, if you’re going to be at NAB and want to meet up, drop me an email at novadia@bia.com. I’d love to get together for a chat!
