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STRATA Survey: Ad Spending Climbs; Digital Hits Plateau?

January 27th, 2012 | Read more articles from 2012 or Visit the News Archive
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Advertising Trends Identified in 4th Quarter Agency Survey

CHICAGO, IL (January 24, 2012) – Optimism returns to the media buying industry after it reports impressive growth during the fourth quarter 2011, according to a new STRATA quarterly survey of leading advertising agencies. The industry is confident that business and client spending on advertising will continue to increase in 2012. However, the STRATA Survey noted that Digital advertising was flat during the fourth quarter, but Mobile is building momentum. 

STRATA, the system of choice for over 1,000 agencies nationally, found that 81% expect their client’s approach to advertising and marketing to either increase or stay the same.  This is up 14% based on the same figures reported third quarter 2011. Adding to this positive economic surge, nearly half of respondents said they project the 1st half of 2012 to be better than the last half of 2011 with increases in business compared to the same time last year. The impact shows 31% of agencies noted they plan on hiring in 2012, which is up 29% over third quarter 2011 and up 28% over the same time last year.  

Digital advertising dollars were nearly unchanged during the fourth quarter 2011 compared to the previous quarter. When agencies were asked about their client’s focus on digital, 81% said it was more than it was a year ago, which is actually down 4% from the previous quarter. There is also significant confusion around Digital due to the fact that agencies still say clients don’t understand the value (54%). On the social front, Facebook continues its dominance in ad campaigns with 89% of agencies planning to utilize the medium for clients (followed by Twitter (39%), YouTube (36%), LinkedIn (21%) and Google Plus (18% - up 28% over 3Q 2011).

Agencies reported Mobile advertising during the fourth quarter 2011 was up 39%. The iPhone remains the top choice as reported by 83% of agencies surveyed, though Android continues to close the gap, up 32% over third quarter 2011 and up 50% over the fourth quarter 2010. Although the iPad is still third for Mobile advertising, 76% do say that with Apple and Amazon continuing to focus on building tablet content, there will be an increase in interest in advertising on the newer medium.

The STRATA Survey reveals that the top medium of choice for clients in the fourth quarter was Spot TV (Broadcast and Cable) as reported by 51% of agencies surveyed. Digital was second at 31%, which is down 9% from third quarter 2011, followed by Spot Radio (8%). Spot TV (Broadcast) continues to be an area of interest as 28% of respondents said that they are more focused on it than a year ago, up 12% over fourth quarter 2010. As for Spot Cable, 26% say they are more focused on it than they were a year ago, which is up 66% over last year.

“The key word for advertisers in 2012 is growth,” said John Shelton, CEO/President of STRATA. “Agencies started to reap the benefits of balance sheets turned in their favor during the fourth quarter 2011, brokering a bright early 2012. The STRATA Survey shows that many advertisers are confident that their business and the economy will return to a strong period by midyear.  That sentiment, coupled with strong numbers from the political race, provides an overall positive barometer for advertising in 2012.” 

Client Attraction remains the biggest agency challenge for the second straight quarter according to 37% in the STRATA Survey.  Client spending was the next area of concern with 19% reporting, however it is not nearly as much of an issue as it was in the third quarter 2011, with a decrease of 13%. A growing issue identified by 16% of agencies is advertising costs, which is nearly double the amount reported a year ago. Determining ROI is the top issue in measuring campaigns (47%), followed by Merging Digital and Traditional (41%).

Other prominent findings of the STRATA survey:

• 42% say their 2012 political ad spend will be more than 2010.
• 46% say that during the political season they will advertise in alternative mediums to avoid competition by politicians (41% will compete with politicians for space).
• 49% said they project the 1st half of 2012 to be better than the last half of 2011 (46% also see business increasing compared to the same time last year).
• 4% say that it will be 3-5 years before there is a greater spend in Digital than Traditional media (that’s a 50% increase over 3Q 2011); but 38% still feel that shift will not ever happen.
• Android is the second most popular mobile advertising choice at 71%; iPad remains third (46%). 
• For mobile advertising the top option is Display (46%) followed by SMS (25%, but up 61% since 4Q 2010).
• 44% are somewhat interested in self-service inventory of Digital assets.
• Only 4% said they are more focused on Print than they were a year ago.

STRATA is the only system provider that connects both media buyers and sellers. The custom solutions supplied by STRATA empower clients to sell and efficiently purchase all media types including cable, broadcast, newspaper, radio, outdoor and digital advertising mediums.  On average, over $50 Billion in advertising dollars flow through STRATA systems per year.   

As the system of choice for over 1,000 agencies nationally, STRATA provides media technology that enables organizations to lead rather than react to industry developments.  By transforming the way advertisements are placed and tracked, STRATA adds a new level of transparency to campaigns that is necessary in the ever-evolving media world. 

Headquartered in Chicago, STRATA has been supplying solutions to the media buying and selling industry since 1983.  STRATA is owned by Comcast Cable  For more information, visit, call (800) 9 STRATA, and on Twitter - @gotostrata

© 2012 Strata Marketing, Inc., All Rights Reserved


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