Ad Dollars Return – Social Media hits the Ceiling?

Advertising is looking up in early 2011, according to the STRATA quarterly survey of major advertising agencies. STRATA found that new confidence in advertising during the first quarter resulted in 56% of respondents reporting an increase in overall business. TV is the most attractive draw for advertising dollars, but social media lost ground in the interactive spend category.

As indicated in STRATA’s previous quarterly survey, advertising is steadily rebounding. This quarter, 77.5% of respondents indicated that their customers are either increasing budgets or keeping them the same. This has resulted in an impressive 43% of agencies planning to hire staff this year (a 76% increase over last quarter and 72% increase over the first quarter in 2010). The survey also noted that most agencies expect the economy and their business to return to a strong growth period (31%) by late 2011, with 17% stating that they are already there.

The STRATA survey also found in terms of Interactive Spend, Online Display remains the top choice (76%) followed by Search (57%) and Social Media, which surprisingly fell from second to third (56.3%). Mobile was once again out of step with advertisers, ranked a distant fourth (20.3%) during the first quarter. Facebook is the top Social Media focus for advertisers (82.7%), followed by YouTube (38%) then Twitter (36%). The iPhone is the top mobile device targeted by advertisers for campaigns (76%), followed by Android (46%) and then Blackberry (36%), which is down 31% since the last poll. Interestingly, when asked how they purchase their Digital advertising, “through traditional media” was the top answer followed by “through an Ad Network” (reverse of last quarter).

When comparing all forms of media, Spot TV lead the charge as 45% of respondents indicated that they focused on it more than any other. Digital spend ranked next at 22% and Spot Radio was a close third at 16%. Over 29% of agencies are more focused on Cable than a year ago, an increase of 88% over last quarter.

“Advertising’s rebound in 2010 has continued into early 2011 with even more confidence building results,” said John Shelton, STRATA CEO/President. “Agency business is increasing, and the prosperity is spreading as clients look to spread advertising dollars to all media. This has greatly benefited Cable, which has increased considerably in the last 12 months. The rest of the year continues to look positive for advertisers, and even those out of work, as a large number of agencies expect to hire staff at all levels.”

Radio was once again solid during the first quarter, with 32% of those surveyed indicating that it is more of a focus than it was last year (up 36% over last quarter and up 69% over a year ago). Although a majority (56%) stated that they are less focused on print than last year, it is slowly making a comeback, as 14% say they are more focused on it than they were in 2010 (54% increase over last quarter). The survey found that 70% of respondents indicated that Internet is more of a focus this year, which although impressive, is actually down 10% from last year.

Other key findings of the STRATA survey:

* Location-based advertising continues to stay well off the radar for advertisers; with 63% still saying it is not in their 2011 plans. Those few who are interested throw their support behind Facebook Places as the top choice, followed by Foursquare.

* Digital spend – 39.4% don’t anticipate ever having greater digital spend than traditional. (11% noted that they are having greater digital spend)

* Spot TV – 28% of the survey respondents indicated that Spot TV is more of a focus this year than last year – up 11%.

For more information at http://www.gotostrata.com