Agency Execs: Ad Budgets Slide In Q2, Digital Continues To Rise

by Joe Mandese, Jul 28, 2011, 8:30 AM

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Advertising budgets decreased during the second quarter of 2011, according to a survey of ad agency executives released Wednesday by Strata, the big media-buying processing firm owned by Comcast. The survey, which is the most recent in a quarterly series conducted by Strata, signals a reversal from the first quarter of the year, when a majority of agency executives responding said their ad budgets were increasing. Strata claims to process about $50 billion worth of media transactions for agencies each year.

"Advertising truly mirrors the economy right now," stated Strata CEO-President John Shelton, noting: "As consumers continue to tighten their belts, advertisers are doing the same, which even further emphasizes the importance of maximizing ad spend."

Even as agencies report cutbacks in overall advertising budgets, the Strata survey found some significant secular shifts, especially continuing momentum for digital media advertising budgets.

While TV remains the most important medium for advertisers overall, constituting 41% of the budgets reported in the Strata survey, the media processing firm said it is "steadily losing ground" to digital, which accounted for 24% of budgets. Radio ranked third at 13%.

Perceptually, digital also is taking up more of the average agency executive's mindset, according to the survey, which found 76% of respondents are "more interested" in digital media, up 9% from Strata's first-quarter survey.

"Print advertising continued to struggle this quarter, with 56% of agencies saying they are less focused than a year ago," the study noted.

Not surprisingly, social media was among the highest-profile digital media properties in the minds of agency executives, mirroring a pattern that Strata found in the first quarter of the year.

Facebook continues to dominate agency attention, accounting for an 81% share, followed by Twitter (39%) and YouTube (36%).

Interestingly, Google+ demonstrated strong intent coming out of the gate, with 27% of agency executives stating that they plan to utilize it in their client's campaigns.

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