Top Ad Factor: Fragmentation, Not Consolidation, ROI, New Media.

The proliferation of media options and its impact on audience fragmentation, not the consolidation of industry players, the emergence of new media technologies or the push for advertising accountability has been the greatest factor influencing the ad business over the past five years and will likely be so over the next five years, according to a group of industry leaders surveyed by the American Advertising Federation (AAF).

The study also found the majority (72%) of industry leaders believe the ad business is in recovery mode, but that most (54%) doubt there are any immediate prospects for strong growth.

Asked what lessons they’ve learned from the “boom/bust cycle of the last five years,” respondents overwhelmingly cited the need to take steps during future growth periods to prepare for inevitable downturns (45%).

The study also revealed some startling differences between agencies and advertisers over some key advertising issues. A much greater percentage of agency respondents (25%), for example, cited the need to demonstrate advertising/marketing return on investment than marketer respondents (18%). In terms of the need to “develop compelling creative,” the contrast was even more telling: 36% of client executives saw the need, 0% of agency executives agreed.

Agency respondents (82%) were slightly attuned to issues surrounding audience fragmentation than advertiser respondents (73%). Agencies (68%) were also far more concerned about the convergence of content and marketing than clients (36%), while more clients (73%) believe new technologies such as TiVo may threaten traditional advertising formats than agencies (61%).

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The survey was conducted for the AAF by Atlantic Media Co., publisher of The Atlantic Monthly magazine. Response rates were not disclosed.

By Joe Mandese
Courtesy of http://www.MediaPost.com