Today's Guest

Gordon Borrell serves as the CEO of Borrell Associates Inc., a leading research and consulting firm focused on media and advertising. The company specializes in delivering data-driven insights and strategic counsel to media entities, advertisers, and industry stakeholders. His research and analysis have proven invaluable to media companies seeking to thrive in a dynamic media environment, enabling them to align their marketing strategies with evolving consumer behaviors and technological shifts. Advertising plays a very important role in the success of businesses across all industries. As Gordon aptly puts it, "Are you allocating enough of your revenue to marketing? Are you targeting the right audience? Do you have the optimal mix of marketing channels? Avoid aimless efforts; ensure you have a clear target and the right tools."

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Episode Transcript

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Gordon Henry:

Hey, hey, this is Gordon Henry at Winning on Main Street. If you want to know what businesses spend on advertising and marketing, ask Gordon Borrell. Borrell's name is synonymous with local business advertising and marketing. His company, Borrell Associates, was founded in 2001 with a focus on tracking, analyzing, and forecasting what local businesses in the US spend on advertising and marketing right down to the county level for all markets. And they're still doing it, 22 years later. Borrell is releasing their 2024 local advertising forecast this week on September 15th, four days from now. So we'll be getting up-to-the-minute insights today.

What should you, our listeners, get out of this episode? If you're a small business, Gordon Borrell can give you insights on how best to spend your advertising and marketing dollars. And if you're a casual listener, Borrell always has fascinating insights on the state of the local ad market, and if you want more of this type of information, you can go to www.BorrellAssociates.com and consider becoming a client. So always good to have another Gordon on the show. So Gordon, welcome to the show.

Gordon Borrell:

Gordon, thank you.

Gordon Henry:

Great to have you. So let's dig in. So first let's start broad. Give us a little background on you and your company, Borrell Associates. How'd you get interested in local business marketing and what made you decide to get into tracking the space?

Gordon Borrell:

Sure. Long time ago, I was an altruist wanting to change the world, becoming a journalist, a newspaper reporter, and quickly learned, Gordon, that there's only so much money in that. So shifted to the corporate side of that business, a big company called Landmark Communications. It's about a billion dollar company. We owned radio, TV, newspapers, magazines, the Weather Channel, cable. And at the ripe page of about 32, 33, I found myself in charge of new media for a billion dollar company because I owned a computer back in the late '80s, I guess. And so I learned a lot in that period, working with some really, really bright people. I was basically a corporate weenie. I didn't have any budget or any staff, but I was trying to lead the charge with regard to the internet and electronic distribution of all this content.

We owned Autotrader, we co-owned that with Cox. We owned the Weather Channel. We owned, like I said, newspapers and TV stations. So we put the first television station on the internet. I think the third newspaper to be on the internet was one of ours. We were there early. When I started the company in 2001, left that company, I wanted to take all of that knowledge to the world of advertising, which is the lifeblood of media, media companies.

So the vast majority of our clients are media companies. Everybody from YouTube to Meta to TikTok, down to local newspapers and TV, outdoor radio stations, big companies and small. And tracking, advertising, we found particularly local advertising isn't done very well and it's not really done by that many people. So I think we're providing some insights that the market doesn't have on trends and advertising. We run the largest survey of local advertisers in the country. We do it twice a year, massive survey, and then we have a monthly panel we keep pinging and we also track all advertising expenditures, even telemarketing, I'm sorry, which is an advertising expense, and paid search and radio, et cetera. So that's what we do. I'm deeply immersed in advertising.

Gordon Henry:

And you're tracking local business spending or big business spending as well. What's the cutoff?

Gordon Borrell:

We have to track it all. So we track about $350 billion in advertising in the US, about a 10th of that in Canada. But we kind of separate the national and really don't spend a lot of time with that because local is really kind of misunderstood and kind of difficult and dirty to do. Therefore, not that many people do it. So we spend nearly all of our time tracking spending by SMBs. And SMBs, as you know, have broad definition. It could be a business with 500 employees, say a bank. It could be a florist with two employees. But locally based businesses that spend to reach local consumers in the market, spend their marketing dollars, that's what we track.

Gordon Henry:

Okay. Now, before we get into the specifics of the current data, I wanted to just ask you more broadly, how have you seen the spending habits of local businesses change over time?

Gordon Borrell:

Yep. Interesting. You said at the beginning of the show when we opened up that I've been doing this. I've been doing it for 22 years, year in and year out. And Gordon, it's kind of like, I feel like Groundhog Day to some extent. People say, "Well, is traditional forms of media, newspapers and radio and TV still declining?" And I'm like, "Yeah, the sun's still rising in the east and setting in the west."

So those trends, while they change slightly, and I'm excited to tell you how they're changing we think for 2024, bit of a different thing is, I guess the bigger thing I'm kind of itching to tell you about. If we don't take the past 20 or so years where there's been this very slow, steady migration to digital forms of media which are cheaper and more targeted or less expensive and more targeted, and actually they work well for advertisers and this migration, first to search and then the social media, now to video, is this amazing transition, Gordon, that we've picked up on from advertisers being novices or not knowing a lot about marketing to slowly becoming masters. And masters, people with a lot more experience in marketing, tend to spend their dollars very differently. So I'm excited about that change.

Gordon Henry:

Okay, so you have a new report coming out. This Friday, I guess is the big day when you announce it. What are the headlines on the report? What can you share with us for this early glimpse?

Gordon Borrell:

Sure. We've got local advertising increasing, it doesn't sound like much, 4%. But it's a healthy increase. It's not one or two, it doesn't typically... local advertising is about 150 billion category or a little more than a third of all advertising is spent by local businesses locally. But four, four and a half percent somewhere around there for next year. That's pretty healthy and it's driven by a number of things. One, of course, it's a political year and that throws a lot of money into the equation, particularly for broadcast TV. It's a presidential election year. Broadcast TV and for digital, so that throws billions into the equation.

But also, like I said, we've seen this growth and sophistication in local marketers. And local marketers spend more. They spend more as a percent of gross revenue on advertising because they're getting smart and realizing that advertising isn't an expense as everybody is complained, it's an investment. And the more experience they get, they go, "Wow, yeah, I spend a little more over here and I do it the right way and it actually moves the needle in sales." So that's pushing up the numbers a little bit more. Those are I think the biggest headlines.

Gordon Henry:

And this growth and expertise that you're seeing on the part of the local business or local advertisers, what do you think is driving it? Is it an age thing where folks are coming on who are small businesses who grew up with either tech or computers or social or even AI? Is it a generational thing? What do you think is driving it?

Gordon Borrell:

Time. It's a simple factor of time. So this is where it gets interesting. The way we calculate mastery in marketing or skill level is by asking a couple of questions. One is, how long have you been making marketing decisions and how many hours a week do you spend? That's all we ask. And from there, we're not really determining expertise when you think about it, we're determining time that they've spent in marketing. And then we say, okay, if someone spends fewer than 3,300 hours in marketing, they're still a novice, lifetime hours. If they spend up to, I think it's 6,000 lifetime hours, between 3000, 6,000, something like that, they're novices, or I'm sorry, apprentices. And then beyond that, 10,000 lifetime hours are more in marketing, well, they have to be really stupid to not be masters at that point, spending that much time in marketing. They kind of get it.

Now, think about this, this is just fascinating. If you go back five years, it was pre pandemic. People were updating their own websites, developing their own social media pages, composing their own emails. So businesses, small businesses, are becoming like media companies. Suddenly, they had these things that they had. Write a headline, subject line. Write a story, something about a big sale. So they're developing these marketing skills, and you can see it in the BLS data, the Bureau of Labor Statistics. There's been a big uptick in the number of marketing jobs in this country and a big decline in the number of advertising sales jobs. In fact, the lines crossed where there were more marketing jobs at businesses, a marketing assistant, a marketing director, even at the small business, somebody to handle all the social media stuff.

So as we send these surveys out, it's no longer Bob the plumber or the florist or the HVAC owner answering questions. He sends it over to Sue or Mary or John or whoever, who's handling marketing skills. And guess what, they have more marketing skills. So we see that number go up and up from that mere time and math. It's basically, well, okay, they've spent a lot more time, they must be a lot more savvy. And indeed, I think they actually are.

Gordon Henry:

Yeah, yeah, that totally makes sense. So you mentioned the 4% growth. That's interesting. The US economy, I guess depending on what you look at, is probably growing these days, maybe 2%, two and a half percent. So the ad spend or marketing spend is growing faster, which indicates I would think optimism that people, they have the money to spend and they want to invest it because they think better times are ahead.

Gordon Borrell:

And there's another piece to it. I've really just been talking about advertising, but it applies to something else, which is what we call non-advertising marketing. It's a technical term. So it's all the money that you put into stuff that doesn't involve buying a message or advertising placement in someone else's media. If you design a flyer and a Word document and put it out on windshields, well that expense of the paper and the printing is marketing. And search engine optimization, that's not advertising, that's marketing. It's a technical task. So we track all that, Gordon, as well. That is growing phenomenally. It's growing. It's already more than twice as large as advertising. So let me slow down for effect. Businesses spend more than twice as much on below the line marketing tasks, technological tasks designed to help the market themselves better and other types of non-advertising marketing than they do on classic forms of advertising.

And that continues to grow. And I think that's really interesting. If you think you're a small business, you're listening to this podcast, start tracking all the stuff you do, related to marketing. I think you'd be surprised at the amount of time you and your staff spends reading social media, trying to post something, trying to craft an email, trying to craft a subject line, communicating with customers, all things related to marketing and advertising. So I think they've become enamored of it. It's fun. It's interesting. You get immediate reaction too if you do it right. So that's a great sucking sound of all this digital media towards employee staff time managing it.

Gordon Henry:

Yeah, for sure. I know your organization is very focused on doing this at a granular level. It's not just a big picture. There's also detailed picture. And I'm wondering, are you seeing differences in either the geographies across the United States, some areas hotter than others in terms of spending growth or in the verticals, certain categories, seeing spending more than others, or is it across the board everything you just said is true for everybody?

Gordon Borrell:

No, it's clearly... it's interesting,

If you look at Canada versus the United States, you see some lag there because the pandemic was a little bit longer of a lockdown. They had a very different policy toward cannabis, for instance. Little things like that. And so you see some lag in types of businesses and growth rates and things like that between the two countries.

But then if you look at the verticals, Gordon, what happened is a phenomenal thing. During the pandemic from midyear 2020 until today. There has been a tremendous growth in business applications. And it's true that I think the figure is 75% of them will fail within 10 or 12 years, something like that. And that's probably still true. But if you boil down to or drill down to the Census Bureau statistics department's data on high propensity businesses, you see where all the growth is.

These are businesses that the federal government tags as being highly likely to succeed. In other words, they're not the ones that they're going to fail, the 75% that'll fail in 10 years. And within that group, the way they tag those is they already have a payroll, they already have open positions, so they're hiring, sometimes they're part of a corporation, et cetera, et cetera. And they're in certain trades, and this is where we see the growth construction's booming. If you haven't gone out and taken a drive lately. Real estate is doing really, really well. Professional services, we see a lot of people in a lot of migration from big cities, particularly boomers and early retiring Gen Zers I guess, or Gen Xers and moving back home or moving to resort areas or places where they have a second home and they want to live, then they start side professions or side businesses. That's a portion of it, not all of it.

Information services of course, because we have this flood of information and the need to manage them. And retail trade. People are just buying like crazy, still buying. Most of it seems to be online, but it comes from retail businesses. So those things are exploding with regard to where it's occurring in, so it's rural markets. We just did a whole study on the out west up into Boise, Idaho and maybe down south a little bit. But that whole corridor there where it's like, wow, there's just tremendous amount of growth there. And it's fleeing from the major urban areas. But the other thing, and if you look at the country and regions, it's the South. The South has had a tremendous amount of new business creation compared to any other of the quadrants in the US.

Gordon Henry:

I'm wondering whether AI is playing into this at all. You hear so much news about it. Is that still way at the kind of Google, Microsoft level, or are local businesses thinking about how do I integrate AI into what I'm doing?

Gordon Borrell:

Yeah. About four or five months ago, I was looking at AI and I'm one of those guys that just go, I'm not going to look at the new fad stuff until I can't ignore it anymore, and hope that it goes away. All this stuff about generative AI in particular had grown to such a din that it was like, wow, okay, we need to study it. So we put out a survey, I believe in July, and asked a panel that we have panel of about 2000 advertisers, not all of them respond, what they know about AI. And if you would ask me before that panel survey went out, I'd say nobody really knows about it.

Here's the figure. 36% are either already incorporating... these are small businesses. These are small local businesses. These aren't the big guys. 36% are either incorporating it or planning to, studying it with plans to incorporate some type of AI into their advertising or are already doing it. Now, a very small percentage, about 6% say they're already using or incorporating AI. That figure, Gordon stunned me, that aware of it. The other two thirds of course, are going, "we don't know what it is. We don't care what it is. It doesn't seem to be relevant to us." But this early on, it's kind of stunning.

Gordon Henry:

Yeah, that is really surprising. I think you also look at some of these newer forms of media like streaming video and OTT, which for those are over the top TV and that seems to be rising as well. Can you speak on that?

Gordon Borrell:

Sure. We've been watching this for about five or six years because it showed... it's been around for longer than that. But it showed all the signs of a classic disruptor. It was just perfect in terms of the way it was poised to disrupt television advertising. Television advertising, classic sign, had grown to the highest level, the highest cost, highest CPM of any other type of media. In our surveys, all of our surveys, the average budget for somebody buying TV for TV is about $100,000. And below that is paid search at about 70,000, and below that, below that and below that. So it's got some distance, broadcast TV, which puts it out there and makes it vulnerable. So along come streaming video, a 32nd skippable spot on YouTube or something on Tubi, or some of the other OTT networks. Or even an explainer video. If you're a personal injury attorney and you want to talk about what to do after a car accident, you sit on the edge of your desk and you shoot a video, wow, that's really cool. You're positioning yourself as an expert.

So we go, wow, okay, we know what's going to happen. This is going to disrupt TV, but what every disruptive innovation does, it's going to create a new market. So we looked at where that money is coming from, knowing that it had to come from somewhere. Sure, some of it's coming from TV budgets. But only about 15 20% of advertisers in any market ever buy TV. So it was coming from someplace else. It comes from radio, the most likely type of advertiser to buy streaming video or OTT is a radio advertiser who's never bought television before. So that's occurring. That's the good and exciting news.

At one point, Gordon, in our forecast, and we since revised it down a little bit, and we're going to revise it down a little bit more, I'll talk about that in a second. But at one point in our forecast we had streaming video larger in terms of total expenditures than paid search. Now to be fair, we bucket paid search into two categories. One is paid search, which we all know is paid search, and the other is listings paid search, which would be an Angie's List, a Yelp, things like that. But we did have that OTT portion or streaming video, which includes OTT and CTV, which is connected TV growing to a very, very large size. It's still growing.

We are now tamping that forecast down a little bit because we've watched of slowing of the penetration or the percentage of advertisers buying OTT and an increase, but slowing down just a little bit in the amount that they spend on it. The average is about $25,000 a year for anybody buying OTT or streaming video advertising. So good news is, I guess for anybody in that business, it's continuing to grow pretty healthily. The bad news is that we're seeing it slow down a little bit. It's not going to take over the world like many people initially thought.

Gordon Henry:

Yeah. So boiling this all down, if I'm a local business, I'm in construction or I do roofing or plumbing, how should a local business like mine spend my hard-earned dollars effectively? Could you give me any guidance on what my budget should look like or how I should break it down?

Gordon Borrell:

Yeah, that is a great question and I think it's one of the key questions. There are really two questions that we find advertisers have persistently and consistently, year after year after year. What is the ROI? That's always at the top. They feel like John Wanamaker, 100 years ago, half my advertising works, half of it doesn't, don't know which is which. The other is, okay, how much should I be spending and where should I spend it? Where should I spend it is a matter of opinion. But there are some standards.

So let's start with how much first. If you look at any of the IRS tax data, what people report on their business expense forms for advertising, it comes out to a little below 2% of total gross revenues. Well, that sucks. Don't spend that unless you just want to continue to plot along and be flat or even decline. That's driven by all of those businesses and there are loads of them that don't spend the dime on advertising. I think a more qualified response would be if you look in our surveys and our surveys only go out to businesses that are actively buying advertising. So these are the serious people that buy advertising, right? On average it's about 2.7% for novices, and that is people who haven't been in the advertising and marketing business making decisions for very long, 2.7% of gross revenue. For apprentices, and apprentices get some pretty decent response and have a good mix of advertising, it's 3.4%. And for masters, on average, masters are spending 8.3% of gross revenues.

Here's what I tell people. If you want to maintain, then probably about four to 5% of gross revenue. And you really do need to have the appropriate mix. In other words, you can't put it all into paid search. You can't put it all into newspaper, ROP, things like that. You got to have the right mix. If you want to be aggressive and you want to conquer the world and you really want to grow, then spend 10%. We have some businesses that tell us they're spending 15% and they're just growing phenomenally.

The mix, and give me 30 seconds more. The mix really depends on your business and your campaign. We've seen most businesses, the top things they use are search marketing. That's very, very popular. Social media, that's very, very popular and gets results and not all that expensive and very targeted. Targeted banners. And then they'll pick two or three different types of traditional media. And that's the secret sauce, that's the forgotten piece. Since it's expensive, a lot of smaller businesses don't do it. But it's either television, outdoor, newspapers, direct mail, radio. Radio, I'm sorry, is pretty healthily in the mix because radio's got among the lowest CPMs and tends to be very effective. And the radio people are extremely creative. So depending on what you believe works and what you can assume or create some type of measurement to say, "Hey, we bought radio advertising and it works. Hey, we bought newspaper advertising and it works." That, along with digital, are the appropriate mix. So I guess the message there is don't forget the traditional types of media. They do tend to have some pretty powerful results.

Gordon Henry:

What I think I hear you saying actually is you can't just go with what you think is the most popular thing, because yeah, everybody thinks Google search is great, but that also means it's really expensive. And some of these ones that you may think are less effective, whether it's the newspaper or the Yellow Pages or the direct mail or the radio still work and may, because they're a little bit less in favor, may actually deliver great deals. You may get more leads for your money than you would through Google or Facebook. And at the end of the day, you're a small business, you want the most leads, most quality leads for the least money, right?

Gordon Borrell:

Yeah. And I think you have to acknowledge what you said, what you don't know and what your prejudices are. Nobody reads the Yellow Pages anymore, nobody reads newspapers anymore. Well, I've seen research, and I'm sure you've seen this too, Gordon, it's just amazing to me that in smaller markets, and it's probably changed since then. But markets with 100,000 or fewer people have a greater likelihood of turning to the print Yellow Page book than they do to Google. And you go, that's crazy. And it was sponsored by the Yellow Pages Association group, search market association, whatever the group is.

Oh, well, it must be biased. Well, it's not. We've looked into it. But think about it. If you're in a small market and you want to find a plumber, what are you going to get if you go to Google and type in, plumber. You're going to get all kinds of people who aren't even in the market. Just referral services. If you go to the book, it's small, it's somewhere in one of your drawers and you might recognize a name. So therefore, you have to think. I would seek out an expert and try to make sure that expert is not biased about. I really want you to buy TV because I make a lot of money putting together TV spots. That's not the right reason.

Gordon Henry:

As you know, the Yellow Pages industry has been tracking the usage of those print products, print Yellow page products consistently for decades and decades. So it's been the same methodology year after year after year. And while it has declined, it's still something. And then order of three and a half billion references a year in the United States, still a very big number. They're happening somewhere. And we know our company, from experience, that those local advertisers still got a really good bang for their buck.

Gordon Borrell:

Yeah, we're hearing similar things about direct mail. People going, "You got to be kidding. Direct mail. Who's using that?" A lot of people are using it and it's growing. In 2024, we actually have one of the few traditional types of media outside of TV, I think, and outdoor, direct mail is growing. And that's because the federal government subsidizes it. The postal rates for retail or mail is very, very low. So it's just pennies to send out a piece, and it's a numbers game. The response rates are still 1, 2% maybe. So that's pretty good, if you're selling a car or if you're trying to put a roof on somebody's house. You get some decent response rates. So you have to think about those things, do the math.

Gordon Henry:

Yeah, for sure. This has been great. We're going to take a quick break. We'll be back with insights from Gordon Borrell, more on marketing and advertising. Don't Go Anywhere.

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Gordon Henry:

And we're back with Gordon Borrell, Borrell Associates. Fascinating conversation about what's going on in the world of marketing and advertising spending, including some forecasts for studies for what's happening in 2024. So you have your own Gordon Borrell podcast. What's on the podcast and why should people listen?

Gordon Borrell:

Why people should listen is you never know what you're going to get. Corey Elliott, who is my vice president of market intelligence, brilliant guy, is my co-host and he and I have a certain sort of grist between us. We don't always agree, and it's pretty cool. We cover local advertising and marketing, as the name implies. We typically have high level CEO or important, I guess, industry executives, somebody with insights. We typically seek somebody who has a contrary opinion about things. We have fun. It's about 20 minutes long. And our upcoming guest in October is going to be none other, and we're very excited about this, Gordon Henry. How about that?

Gordon Henry:

That sounds good. It's going to be a good show. We're looking forward to it.

Gordon Borrell:

That'll be the most popular show.

Gordon Henry:

Absolutely.

Gordon Borrell:

Very popular. But we had a series, just to give you an example. Remember we talked about AI a few minutes ago, Gordon. At the the end of the spring, I interviewed a guy named Tony Ridder, who was the CEO of Knight-Ridder, the largest newspaper chain, did spectacularly well and then spectacularly failed. It was just a really interesting interview, his perspective on things. And at the very end of the interview, I asked him about AI and his voice kind of trailed off in a very worried way, and he said, "This is dangerous. This is going to have a profound effect." Then he pretty much just hung up on me. So we ended the interview with that. And I thought, if this guy who is smart as a whip is saying that we better focus on AI. So we did a six part series over the summer on AI with CEOs. One CEO said, "That's a bunch of crap. I'm going to ignore it." Another guy said, literally, "It's probably going to be as profound if not more than the discovery of fire and electricity."

So those are the types of things that we tackle on there. I'm looking forward to having you on the show, and we'll talk a little bit more, I think about the small and medium-sized businesses and what they're going through. There's a lot of hand wringing out there, Gordon, as to like you just said, what to spend and where to spend it.

Gordon Henry:

Yeah. Well, funny enough, you and I share not only a name, but I think the beginning of our career started in the same way. I got out of college and worked very first job out of college for nobody other than Tony Ridder, gentleman you just mentioned. Yeah, my first job out of college was as a newspaper reporter for the Wichita Eagle Beacon.

Gordon Borrell:

Oh boy, how about that?

Gordon Henry:

Yeah. And Clark Hoyt was the editor, and Buzz Merritt was the publisher, and we were part of the Knight-Ridder chain. And later on I worked in Philadelphia for Philadelphia Inquirer-

Gordon Borrell:

The Inquirer.

Gordon Henry:

Which was part of the Tony Ridder empire as well. So I know the company quite well, as well as the ups and downs, as you mentioned, of what happened to them.

Gordon Borrell:

That's great. I didn't know that. That's fascinating. The Inquirer was the newspaper I always wanted to work at, but never got hired. And in fact, as a carrier, I delivered the Philadelphia Inquirer on Sundays, I carried the Bulletin, which was the afternoon paper. But sold the Inquirer on the beaches of South Jersey in the summers.

Gordon Henry:

Jersey. Yeah, so good memories, but a long time ago. So turning back to you, I know you've for a long time, run your conferences, the Borrell conferences. Are those still going? Tell us about those.

Gordon Borrell:

Oh, hell yeah. We started in New York in 2010 and we had it at the Grand Hyatt, the biggest grandest hotel in New York, and the first one was sold out. And that surprised even me. And we moved. The Grand Hyatt shut down because they needed to renovate, and we had a lot of pressure to move to New York, which I was frankly thankful for because every year we were holding them in March in New York, and I was looking at snow, canceling it every single year. So we moved to Miami in 2019, I guess, or 2020. And we were the last conference to be held in 2020. It was in March.

Gordon Henry:

I think I remember that. The ones who showed were braving the COVID, right?

Gordon Borrell:

Oh my God. Yeah, we were lucky. I guess we skipped 2021 and we'll be back in 2024 in Miami at the Marriott in Miami. It's a great show. There's about 350 people there. It's a very fast-paced. It is a show. It doesn't drone on with panelists and things like fireside chats and stuff like that. It's pretty exciting. We have a lot of fun. Stay and a half in Miami. I think it's the first or second week in March. I should have the dates right in front of me, but just Google, Borrell Miami and you'll find the details. Thanks for the plug.

Gordon Henry:

Yeah, yeah. Sounds great. So just to close out, we have a minute or two. Beyond the 2024 forecast, what can you tell us is next for Borrell Associates? What's happening next?

Gordon Borrell:

We actually have two new products, one that we soft launched a year ago and we're pushing out now, and another one that kind of identifies the businesses that have the capacity to spend certain amounts of money on certain types of advertising. So the first product that we launched a year ago, mainly for agencies, but we find direct buyers are very interested in it as well, uses mobile data through kind of an ingenious algorithm that determines where people live, based on their phone, simple, no secret, based on their phone, resting in a location for at least eight hours overnight, that's their home, and then factors out other things. But then looks at a local business and says, okay, where are your customers coming from? So it factors out employees which go there every single day. And it looks at other patterns. So that product is called Local Scope.

And that is a really cool way to get a profile of your customers using a segmentation scheme. So if not that interesting, people are going to say, "Oh, I know who my customers are." Well, maybe you do, maybe you don't. But what's more interesting is you can actually then map a location of a competitor. So if you're an Italian restaurant, you're competing with another Italian restaurant, let's find out where their customers are, and then this is really fascinating, Gordon, and part of the reason we started it, because so many businesses are targeting their ads, particularly display, online display, they're missing pockets of opportunity because they just target this, they target that based on assumptions. And this actually can show you where there's no traffic going from this particular zip code, for instance, to your store or your restaurant or whatever retail establishment you have or your competitors.

So you can target in a much different geographic way. That's one. The other one is called Ad Capacity. I don't think we have a fancy name for it yet, but we did an initial project with Ernst and Young looking at businesses based on all of our data. We can tell you how much businesses basically spend and where they spend it, every single business in the US, based on a number of different things, including IRS text data. But this one says, okay, you're interested in OTT. What are all the businesses that have the capacity to spend at least $100,000 on OTT? Where are the businesses that have the likelihood of spending an outdoor, where are they? What are the locations and where's the contact information for that? So that's more geared toward agencies and ad sales reps, that particular product. So we're branching out into those different things using technology to help the advertisers themselves with understanding their own customer base and competitors' customer base, and help the media companies communicate or identify businesses that need their help in local markets.

Gordon Henry:

Very cool. Very cutting edge. Well, we're about out of time. So I wanted to thank you, Gordon, for coming on the show, and I hope folks will check you out at BorrellAssociates.com.

Gordon Borrell:

Gordon, thank you. Thank you very much for having me. I appreciate it. You've got a great podcast. I've listened to several.

Gordon Henry:

Appreciate it. And I want to thank our producer, Tim Alleman, and coordinators Diette Barnett and Daniel Huddleston. And if you enjoyed this podcast, please tell your colleagues, friends, and families to subscribe. Please leave us a five star review. Really appreciate it. Helps us in the rankings. Small business runs better on Thryv. Get a free demo at Thryv.com/pod. And check out our free new product command center at Thryv.com. Until next time, make it a great week.

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