Strata

REPORT SHOWS INTERNET LEADING THE WAY IN 2010

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Internet appears to be spearheading media buying agencies toward a recovery.  Compared to just one year ago, Internet advertising has witnessed an 82% growth as the avenue of choice in STRATA’s survey of media buying agencies.

Uncertainty of a recovery along with the strong emergence of Advanced Advertising as an advertising choice, also highlight STRATA’s report.  STRATA, a leader in media buying/selling software conducts a quarterly survey that notes trends of agencies of varying sizes across the country.

The survey revealed that many agencies are seeing a recovery, but also quite a few have not been as fortunate.  While 38.6% see their business increasing in the 4th quarter 2009 versus the end of 2008, almost half (47.7%) felt their growth will remain stagnant in the first half of 2010.  When asked when they see the economy returning to a strong growth period, the answers stretched fairly evenly between early 2010 to not until after 2011. 

For the first time in over a year, a quarter of the agencies polled plan on hiring staff in 2010, and only 4.5% felt they’d have to reduce staff.  This comes from the 38.6% who saw their business increasing at the end of the year and the 25% that felt that their customers planned on increasing their spending budgets from 2009. 

Internet is the largest growth area in the STRATA survey.  Of those polled, 79% say their customers have a larger focus on Internet advertising than they did a year ago, opposed to TV at only 22.7%.  TV is still the medium of choice with 48% of respondents feeling their clients are more focused upon that than any other media.  But in the last year that strong grip on the top spot has dropped by 21% in the STRATA poll.  Internet and more non-traditional forms of advertising seem to be making a run at TV.  That is also evidenced by the fact that 68.2% list Facebook as the social media of choice in their clients’ campaigns.

“Clients are making it clear to their agencies that they want a comprehensive media mix,” said John Shelton, STRATA President/CEO.  “That shows in our study where we saw a slight drop in TV and the increase of newer media as viable choices for agency clients.  Let’s face it; virtually every media has internet at play.  Cable, TV, Radio, Print… they all rely on an internet presence and thus, all benefit from a strong uptick in Internet advertising.”

Compared to STRATA’s survey at the end of 2008, Media Mix is a growing concern of media buying agencies.  While “Client Attraction” is the largest challenge agencies are facing (40.9%), Media Mix is a growing concern along with Client Spending.  In 2008, Media Mix was last on the list of concerns and Client Retention and Ad Costs were agency’s top challenges.  In the 4th quarter 2009 survey, Media Mix was up 264% from the previous quarter and now one of the top concerns.

Joining in the challenging Media Mix for media buying agencies is Advanced Advertising (Digital Media – i.e. Video on Demand, Interactive).  Of those polled 36.4% felt that they were very likely to fit Advanced Advertising into their customers’ plans this year.  That is a 108% increase from the previous quarter.  As a matter of fact, 75% of the respondents said they were either “somewhat” or “very” likely to advertise in this medium in 2010. 

Radio and Print have both dropped in the opinion of those polled.  41.9% of those polled felt that their customers’ focus on Radio will be less than last year.  In 2008, that number was only 30%.  Print advertising continues to drop, as 43.2% of the respondents say their customers’ focus on Print will be less than last year.

More results of the STRATA survey:
* 59.1% of agencies felt that Electronic Connectivity was the item that changed the most in the industry in the last 5 years.
* 31.8% say that their customers are keeping the same budget as they had in 2009.
* Only 13.6% expect their business to have less growth in the first half of 2010 than the last half of 2009.
* Only 2.3% felt that their customers will have more of a focus on Print than they did last year.