TV advertising hits 3 year low

Focus on TV advertising has hit a three-year low as the gap between TV and digital narrowed to its closest point ever, according to a survey compiled by STRATA.

Interest in digital advertising is closing in as several popular social media sites reached previously unseen levels of agency interest last quarter. TV advertising still remains the top advertising medium with 44 per cent of survey respondents saying they are more interested in advertising on TV (spot TV/cable) than any other medium. While TV is still number one, this represents the lowest level of broadcast advertising interest seen in the STRATA quarterly survey in nearly three years. Gaining steadily on TV, digital is the second most popular medium at 35 per cent, the largest share of interest it has received in the survey’s five year history.  Digital is up 16 per cent over last year.

“It is no surprise that digital has become an integral component for many advertising campaigns. Now, the only question that remains is how close the interest in TV and digital advertising will become in the future,” said John Shelton, President and CEO of STRATA. “Moving forward, we expect to see ad dollars split even more evenly between traditional media and the newer avenues that continue to gain market share, such as mobile and social media.”

Many of the non-traditional mediums continued to gain advertiser attention last quarter. Sixty-one per cent said Video (including TV, cable, network and streaming) was the main area of focus for their overall campaigns. Sixty-six percent of respondents were more interested in online video than last year. YouTube is the top online video site for agencies (69 per cent), Hulu is second (35 per cent), and Netflix and Vine are tied for third (14 per cent).

“While we’ve seen a lot of growth in video advertising, we’re just touching the tip of the advertising iceberg as Facebook, Twitter and others continue to expand their video offerings. We’re expecting more online video advertising orders to go through our system moving forward due to the demand from media buyers and the increased capabilities of the sellers,” said Shelton.

Streaming/online radio continues to see momentum with 58 per cent saying they are more interested in it than a year ago. Interest in traditional radio advertising continues to fall as 86 per cent said their clients were interested in traditional radio at the same level or less than last year, representing the lowest rate of interest for radio seen in 19 quarters.

Facebook (90 per cent), YouTube (55 per cent), Twitter (53 per cent), LinkedIn (35 per cent), and Pinterest (25 per cent) all reported record highs for agency campaigns. A large majority (74 per cent) use free social media to support client campaigns and 25 per cent say they see a better ROI on paid social compared to free. Eleven per cent experience a better ROI on free social.

The ad economy generally looks healthy as over half of the agencies polled experienced an increase in business compared to this time last year. Client attraction remains a main challenge for agencies (41 per cent) and client spending is the next biggest challenge for agencies (21 per cent). Client spending historically gets a spike in the second quarter as a major concern for ad agencies due to the completion of the ad orders from the first half of the year and uncertainty over ad spend for the next half of the year.

Other key findings:
•    28 per cent feel they will have a greater spend in Digital than Traditional in 1-3 years. 27 per cent say they don’t ever anticipate a greater spend in Digital (down 45 per cent and the lowest percentage ever).
•    A vast majority of agencies choose to advertise via display ads on other mobile content (76 per cent) rather than build mobile sites or applications themselves.
•    Most agencies seem content with their current staffing situations. 24 per cent of agencies plan on hiring (Down 22 per cent from last quarter) and 72 per cent are keeping staff numbers the same.
•    23 per cent feel the economy and their business has returned to a strong growth period, while 26 per cent expect that to occur by early 2014.

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