November 19th, 2015 | Read more articles from 2015 or Visit the News Archive
Advertising Trends in Focus: New STRATA Study Finds Ad Economy Strong Ahead Of Holiday Season and New Year
A newly released Q3 survey of advertising agencies conducted by media buying and selling software firm STRATA found that 53% of agencies see their business increasing now over the same time last year, offering optimistic signs for the ad economy as the holiday season approaches. Broadly, the outlook for the end of 2015 looks strong as 45% project their growth to be higher in the second half as compared to the first.
Client budgets this year are expected to increase at 17% of agencies, while 57% of agencies polled see client budgets remaining flat compared to last year. Forty percent of agencies plan on hiring additional staff in the second half of this year, the highest percentage recorded in the STRATA survey in five years. Despite the positive signs, attracting new clients is now the top challenge for 33% of agencies, overtaking media mix (22%), which was the top agency challenge for three of the last four quarters.
Agencies are continuing to devote more focus to streaming/online video as 71% report more interest in that medium compared to a year ago, the largest increase in the history of the survey and a 23% rise from 3Q14. Increased confidence in the ROI of online video is helping drive this trend, as 45% state they are confident they are getting good value in recent online video ad purchases, up 51% from a year ago. The percentage of agencies that are still unsure of online video advertising value dropped 24% from a year ago to 36% of agencies.
Contributing to increased confidence in online video ROI, a higher percentage of agencies feel their video ad buys are more accurately targeted than in the past; 55% percent say their online video ads reach their intended targets most of the time, up 38% from a year ago. New trends in how to increase the reach of video ad buys are also emerging, as 52% of agencies say accessing video aggregators/ad networks is very important or important to them, a jump of over 54% from the second quarter. A majority of agencies (76%) now say it is very important or important to extend their buys into premium online video from cable/broadcast networks, a 32% increase from a year ago.
“As confidence in online video ROI grows, agency appetite and acceptance of different forms of digital video will only rise,” said J.D. Miller, director at STRATA, in a news release. “We are seeing agencies increasing their focus on automation tools including programmatic, to find the right inventory, the right audience at the right time.”
The survey also found 40% of agencies are making at least 20% of their buys programmatically. Agencies are entrusting programmatic buying for a range of ad types, including mobile (29% of agencies), streaming video (22%), and streaming audio (24%). The ability to target audiences is the top benefit of programmatic buying for 48% of agencies, followed by improved buying automation/efficiency (43%). Worries over the quality of inventory remains the prevalent concern with programmatic buying for 60% of agencies, followed by transparency into inventory sources (45%).
Other findings include:
- 32% of agencies say they are more focused on digital than any other medium.
- 77% of agencies are more interested in digital than they were a year ago, and 69% are more interested in mobile compared to a year ago.
- Facebook strengthens its hold as the top social media choice for 96% of agencies, a 14% increase from a year ago. This marks the second highest percentage since the survey began in 2008. YouTube is second at 68%, followed by Twitter in third at 53%.
- Instagram jumped 56% from a quarter ago and moved into the fourth spot for the first time in the survey’s history as the top social media choice for 40% of agencies, surpassing LinkedIn (28%).