Digital Gains amid Slow Ad Market
Advertising spending decreased during the second quarter, a reversal of positive spend during Q1, according to a new STRATA quarterly survey of major advertising agencies. However, continued investment and interest in Digital is on the rise.
STRATA, a leading media buying and selling software provider, found that optimism at the start of 2011 waned during the second quarter, with 17% of agency respondents noting a reduction in overall business (compared to a 38% jump during 1st quarter).
TV is still the top form of traditional advertising, but Digital focus increased this quarter due to such major launches as Google+.[ Also Read: Newspapers, TV on Deathbed; Online in Baby Bed ]
The STRATA survey suggests that TV is still tops for advertisers (41%), but the medium is steadily losing ground against Digital (24%), with Radio rounding out the top three advertising options at 13%.
When asked about Digital focus at the agency level, 76% responded with more interest, which is up 9% over last quarter. Print advertising continued to struggle this quarter, with 56% of agencies saying they are less focused than a year ago.
Consistent with STRATA’s first quarter survey, Facebook leads Social Media for campaigns (81%), followed by Twitter (39%) and YouTube (36%). Newcomer Google+ is not only on agency radars, but 27% plan to use it on client campaigns.[ Also Read: CNN to Stream News Network Online, On Mobile ]
Online Display dominates as the leading Digital advertising option (78%), followed closely by Search (64%), Social Media (52%) and Mobile (26%), which had the largest jump from last quarter, up (24%).
The survey says that Apple still owns mobile, with the iPhone as the top mobile device of choice (87%), and iPads were third for the first time at 47%. Android is in second and quickly closing the gap with iPhone (62%, up 36% from 2010).
Even with more industry buzz in Q2, location-based advertising isn’t a significant spending target, as 68% of advertising agencies say it isn’t in their plans this year.[ Also Read: Time for Sports Illustrated to Go All Digital ]
“Advertising truly mirrors the economy right now. As consumers continue to tighten their belts, advertisers are doing the same, which even further emphasizes the importance of maximizing ad spend,” said John Shelton, STRATA CEO.
“It’s important to keep these numbers in context, because we still see a promising trend of agencies planning to hire (33%). We also see advertisers exploring new affordable advertising avenues, like Digital and Radio, while the more expensive traditional platforms, like TV, are seeing a slight dip in spend. Even though it’s not all doom and gloom, national events continue to impact the fluidity of the advertising industry, and most agencies do not feel it will return to a strong growth period until after 2012.”[ Also Read: Reader’s Digest Gets a New Reader: iPad ]
Merging traditional and Digital into one campaign is still a top concern for advertisers and their clients. For example, over 61% of respondents felt that cross-channel ROI reporting is the most important measurement issue today. Cloud-based programming was buzz worthy this quarter, but there’s still skepticism concerning its impact.
The global ad spend is expected to reach $500bn in 2012.
Other key findings of the STRATA survey:
- 29% indicate clients are making budget cuts.
- Video and recording options aren’t killing TV advertising, yet. 45% say that DVR’s, Hulu, Netflix and others aren’t impacting purchases.
- For mobile advertising, Display is tops for Mobile (48%, up 19% over last quarter).
- QR codes are getting more popular as over half of the agencies polled use QR codes in campaigns.
- 21% say that they are more focused on Radio than they were a year ago.
- While most Social Media outlets are growing in interest, LinkedIn hasn’t witnessed much growth the past year.
- In-Game advertising didn’t garner a single response as being an interactive option for their advertising spend.
- Ad Networks (Google, Yahoo, Yellowbook, etc.) were the top option for buying Digital, followed by traditional media sites and direct from the publisher.
- When asked about their interest in using Mobile for locally/regionally focused campaigns, 62% say they are somewhat interested.
- Targeted/highly contextual campaigns with a small reach are more attractive (68%) to agencies compared to mass appeal buys that reach a wider audience (22%).
The survey results were announced Friday, July 29.[ Also Read: Digital Media Campaigns ]
STRATA is a leading provider of media buying and selling software. The custom solutions supplied by STRATA allow clients to sell and purchase all media types including cable, broadcast, newspaper, radio, outdoor and digital advertising mediums. On average, it says, over $50 billion in advertising dollars flow through STRATA systems per year.
Headquartered in Chicago, STRATA has been supplying solutions to the media buying and selling industry since 1983. It is owned by Comcast Cable.