November 5th, 2012 | Read more articles from 2012 or Visit the News Archive
STRATA SURVEY: POLITICAL CUSHION GOING AWAY; INDUSTRY COULD FACE DOWNTURN
Advertising Outlook Uncertain After Political Season Ends
CHICAGO, IL (November 1, 2012) – The avalanche of advertising that comes with the political season will end soon, followed by a period of uncertainty. That is a key finding of the latest STRATA quarterly survey of leading advertising agencies. While TV stations are seeing an influx of spending by agencies, 47% of media buyers polled say their clients are waiting until after the elections to advertise in order to avoid competing with political buys. The finding suggests advertisers are concerned about future costs.
The latest findings demonstrate a significant shift from the second quarter when a majority of agencies polled were willing to compete with political advertisers, and only 18% said they would wait to advertise until after the elections.
STRATA, the system of choice for over 1,000 agencies nationally, found that TV continues to remain the number one choice of both political and non-political advertisers. In fact, only 15% of non-political buyers say they will advertise via other mediums to avoid the onslaught of political advertising on TV.
Only 35% of agencies polled expect their business to be better for the second half of the year. 19% expect business conditions to be worse (that’s up 188% over the second quarter). A quarter of agencies polled do not expect an increase in budgets this year, but over half of agencies expect budgets to remain the same.
The outlook for 2013 continues to look uncertain. Nearly a third of agencies polled don’t expect their business to return to a strong growth period until after 2013. That is a shift from STRATA’s second quarter survey where they expected a growth period to occur at the beginning of 2013.
“The challenge for agencies is not maintaining business, it’s landing new business,” said John Shelton, President/CEO of STRATA. “Over 40% of media buyers say attracting clients is their biggest challenge followed by client spending.”
Another obstacle is the lack of inventory. The onslaught of political advertising right up to the election has forced the holiday advertising season to become compressed.
“From what our agencies tell us, this is adding additional strain as they either scramble to find ad space or at the extreme - they sit out completely,” said Shelton.
Many of the agencies that deal with political advertising are having a great year as 36% say they saw a greater political spend than last election. Less than half (45%) see their business increasing in the third quarter compared to the previous year. While encouraging, that’s the lowest percentage going back eight quarters (going back to third quarter 2010).
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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.
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