It’s not the just the big guns in the agency business (WPP, Havas, et al.) that are worried about their business outlook for the rest of the year (and possibly beyond).
A new survey from advertising software provider Strata, which has more than 1,000 agency clients across the U.S., confirms that mid- and smaller-sized shops are concerned, as well.
The survey, conducted in June with 73 respondents, showed the number of advertising agencies anticipating slower growth in the second half of 2017, compared to the first half increased by 158% from the previous quarter.
The survey also found that 66% of agencies expect their budgets to stay the same or decrease, while 28% expect an increase.
In addition, 41% said winning new business is their main concern, while 23% reported client spending as their biggest concern.
Only 25% anticipated the need to expand staff, a 35% decrease compared to the previous quarter.
“The advertising economy quarterly results, at first glance, are pretty bleak,” said Judd Rubin, SVP at Strata. “However, when put in perspective, 2016 was a banner year with the U.S. elections and the Olympics. Even without general economic uncertainty, it would be difficult to sustain that type of growth.”
When it comes to projected platform use, social media has seen a bit of a shakeup. Facebook remains perched on top with 97% of agencies intending to use it, but Instagram’s projected usage has risen to 64%. YouTube has fallen to third at 60%, and Twitter remains a distant fourth with 38%.
That said, ad spend on social media has not moved significantly. While 22% of agencies allocate 11% to 25% of their budgets on social, 74% plan to spend less than 10%.
Client focus on traditional media remains strong, with 66% of agencies reporting their client’s interest in network TV and cable remained the same when compared to last year. The same is true for radio at 63%, local TV and cable at 62%.
In other media, 76% indicated their clients were showing a greater interest in digital video, while 78% reported a growing desire on the part of their clients to advertise more on mobile. Nearly half (46%) of agencies also reported their clients were curious to explore new live-streaming technologies, such as Facebook Live to amplify their campaigns.