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STRATA 2nd Quarter Survey: Ad Agencies Go Mobile, TV Losing Ground Quickly, Ad Economy Sees Big Gains

July 21st, 2010 - The popularity of smartphones and in particular, Apple’s iPhone, is leading advertisers to make major investments in mobile advertising, according to the STRATA quarterly survey of major advertising firms. Nearly one-third of advertisers say that mobile advertising is the focus of their interactive spend. That is up 107% over the first quarter of this year and marks a major increase in spending for the relatively new platform. Overall, digital advertising continues to encroach on TV as an advertising medium of choice. STRATA, the leader in media buying/selling software, conducts a quarterly survey that denotes agency trends by surveying top advertising firms in the United States.

When polled on the types of mobile devices that most intrigue firms, iPhone ranks at the top with 87% saying their clients are interested in advertising on the Apple device. Trailing the iPhone by nearly 30% are Blackberry and the recently surging Droid. iPad ranks lower than all three with only 26% interested in the iPad device for their advertising.

“High profile campaigns from Apple and Google seem to be the reason for the interest for the iPhone and Droid,” said John Shelton, STRATA President/CEO. “Advertising on mobile devices is a new frontier that people are rushing to explore. Whether it will provide the necessary ROI for the early advertisers is yet to be seen, but one thing is for sure – many advertisers feel the gamble is worth it.”

Television still remains a viable option for advertisers but not like it has been in the past. 35% say they are more focused on Spot TV than any other ad choice. While still significant, that’s down 16% from last quarter and 22% from a year ago. According to the survey this trend is accelerating. At present, only 6% separate TV and digital as the advertising medium of choice. With 72.5% of agencies saying they’re more focused on digital than they were a year ago, it suggests it might accelerate further. Nearly a quarter of respondents feel that it will be three years or less before they will have a greater spend on digital than traditional advertising.

This interest in digital and mobile advertising may be a result of advertisers feeling more confident in the economy. 27% say their business has returned to a strong growth period. Just as impressive, almost half of those polled see their business increasing in this quarter over the same time last year (that’s up 73% from a year ago).

“We aren’t totally out of the woods yet,” explained Shelton. “While definite signs of a recovery and growth may be present, many advertisers are now facing new challenges.”

Nearly 30% say they plan on hiring staff at some point this year, that’s a 99% increase from the same time last year. While business does seem to be picking up, there are still plenty of challenges, the largest being client spending. In STRATA’s survey at the end of 2009, client spending was a concern but was overshadowed by the challenge of attracting new business.

Other key findings of the STRATA survey:

56.4% say they handle Search/SEM/PPC In-House

The majority of respondents say they buy their digital advertising through Ad Networks and direct from the publisher (72% each)

22% say they are focusing more on spot cable than they were a year ago

Radio continues to remain a viable option sitting behind TV and internet/digital as the advertising avenue of choice (13% say radio is their top choice)

Print continues to witness a decline; 58% say they are less focused on print advertising than a year ago.

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