The STRATA Survey Says the Ad Industry is in Good Shape

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By: Dwayne W. Waite Jr.

The STRATA Survey came out recently, and with the data from over 900 agencies, it is able to paint a decent picture of the landscape of the advertising industry. Thankfully, the picture is a good one, for 52% of total respondents said that business has been increasing compared to the same time last year. As the economy looks to still be down, the survey highlights several elements in the ad industry that may point to as signs that the economy is picking up. It points out the obvious; for example, one of the biggest challenges for agencies is attracting new business (38%) while client spending comes in at second with 22% of respondents. New business and client spending will never cease to be causes for concern for agencies, so to have those problems be the biggest ones could be considered as a good thing. Sometimes it is better to have the pains you know rather than the ones you don't, right?

As we complain about the lack of young talent in the ad industry, it looks like that could change. The survey pointed out that 24% of the agencies said that they plan on hiring by the end of the year. That is up from 16% this time last year. What will be interesting to see is if the agencies hire out of the college ranks or from the sidelines. We all know former ad professionals who were unfortunately taken out the game and placed on the bench. With this new influx of hiring, who knows if the young and bright-eyed will beat out the old and seasoned.

The most interesting findings in the third quarter survey are about advertising avenues. Ad folks still love to use local TV (35%), but digital TV is now only one percentage point away from tying, which makes sense when you read that 85% said that clients are looking to invest more in digital over the next year. Network TV is receiving more attention than last year, and poor radio continues to slide downward. An overwhelming majority noted that clients will be focusing more on digital, and the big reasons why point to the rise of (effective) social and mobile platforms. A whooping 89% said they will use Facebook in one of their campaigns, an increase of 10%. Then, YouTube topped Twitter as the second most used social network for advertising, probably due to the increasing popularity of video advertising. Mobile still hasn't changed too much, while the tablet environment is still being figured out.

The article finishes by noting that more agencies believe that they will never spend more on digital than traditional versus those who think they will. And only 56% believe that their clients even see the value of digital. So what does this all mean? It means that brands are starting to spend again, and more importantly, brands are still using agencies to assist them in their advertising. Based on the numbers, as people shift more to digital, the price of engaging in traditional advertising will get more expensive unless those traditional models change their revenue structures so everybody can win with less traffic. Also, if the rules of economics prove true, we may begin to see diminishing returns on advertising with Facebook, YouTube, etc., unless it becomes more localized and targeted. With more businesses on social media platforms, they can become just as cluttered as our other media outlets. And as they become cluttered, and the pricing structures become cheaper, it could be more difficult to convey the value of digital to clients.

Like most research, this too is subject to how we apply it. But research is always a great place to start.

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About the Author

Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.

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