Q3 ad survey: radio down; TV, digital up


The Advertising biz showed its resiliency in Q3 by achieving solid gains consistent from Q3 2010. However, client attraction and decreasing budgets remain the chief challenges affecting overall agency growth. The STRATA quarterly survey of leading agencies also noted a possible shift for the top advertising channel, with Digital and Spot (Local) TV now only separated by a margin of 1%.

The bad news was for Radio: The medium had a downturn–37% of agencies say they are less focused on it as they were a year ago. Network TV noticed an uptick with 12% saying they are more focused on it than a year ago.

STRATA also found that 52% of respondents noted that their business is increasing compared to the same time last year (only 16.5% saw a decrease in business, down 30% from a year ago). Job growth also made a steady upswing this quarter, with 24% of agencies surveyed noting they will hire before the end of the year (up 8% since last year).

It’s now a tight race for the top ad avenues. Local TV remains the medium of choice (35%), though it is just barely beating out Digital (34%), which is up 43% since last quarter. Taking a closer look, 85% say clients are focusing on Digital more than last year. Local Cable noticed a bump as 31% say they are more focused on it than they were last year (up 13% over last year).

Social and Mobile are helping Digital challenge Traditional advertising. 89% of respondents indicated that they would use Facebook in their campaigns (up 10% from last quarter). For the first time, YouTube (39%) is the number two most desirable social medium for campaign, surpassing Twitter (37%). Google+ is still on the outside looking in with only 14% planning to use it this quarter (down 47% since last quarter). LinkedIn was a strong fourth at 22%.

Mobile advertising sees the iPhone as the convincing leader with 78% of respondents noting it is the device their clients are most interested in advertising on (down 10% since last quarter). Android is closing the gap at 54% (up 7% since one year ago). The iPad remains strong at 46% (up 85% since last year). With Amazon and Apple continuing to focus on content for tablets, 69% say that focus will make this medium more attractive to advertisers.

When listing their biggest business challenges, attracting new business remains tops for agency respondents (38%) followed closely by client spending (22%). In fact, most feel that their business won’t return to a strong growth period until after 2012. If market volatility continues, Print and Local TV would be the media most hit by ad spending cuts (Print 52% and Local TV 24%). The auto industry (30%) and entertainment industry (21%) are the two top industries that agencies say are asking to cut advertising.

Other key findings:
20% of respondents say that they anticipate having a greater spend on Digital than Traditional within 1-3 years.

36% say that they will never have a greater spend on Digital than Traditional.

Facebook’s Open Graph launch did create some buzz, but agencies aren’t quite sure yet with 64% saying it is too early to tell if it will help stabilize social media advertising.

Agencies question whether their clients see the value in Digital. In the survey only 56% say their clients understand the value in Digital with 44% saying that they don’t see the value.

29% say clients are more focused on Local TV than they were last year.