• by Jack Loechner , Staff Writer @mp_research, June 10, 2010

According to a new STRATA quarterly survey of advertising firms, which shows that while more dollars are moving to digital advertising, TV remained the top advertising choice in the first quarter of 2010, with 41.8% of ad agencies saying their corporate clients are more focused on TV than any other medium, but he number was down 27% from a year ago. Internet/digital advertising continues to increase with 68% reporting that their customers are more focused on digital than they were a year ago. 

John Shelton, STRATA President/CEO, said "... just as radio gave way to television... TV is slowly giving way to digital... (the) survey taps into the perception that digital has its limitations in reach and effectiveness and must still be used with traditional media... "

Nearly 40% of ad agencies believe it will be at least five years before they anticipate spending more on digital media than traditional media including broadcast and print, says the report.  And, as TV ad share continues to decline, traditional print advertising appears to be declining even further.  Nearly two-thirds of respondents say their clients are less focused on print than they were a year ago.  Not one agency polled feels it will increase print ad buys. 

For now, the biggest obstacle to growth is lack of advertiser demand, cited by 36% of U.S. ad agencies. More than one-quarter complained about the channel's effectiveness-typically considered one of its positive qualities.

The study shows that 47.3% of advertising agencies polled felt their business increased during the first quarter over the same time last year, a reversal from a year ago, when less than 25% of those polled reported that their business was increasing.  The survey also shows that 25% of agencies say they plan on hiring staff this year, a 100% increase from just a year ago.  A third of advertising agencies say the economy and their business will return to a strong growth period by late this year, and 16.4% of agency clients are increasing their advertising budgets.

Additional key findings of the survey:

·      87.5% of advertising firms say they are most likely to use Facebook in client campaigns (followed by Twitter (57.1%) and YouTube (39.3%).

·      62.5% handle Search/SEM/PPC placements in-house.

·      Only 5.4% of agencies plan on decreasing their staff this year.

·      32.1% of the agencies say that their clients focus on spot radio will be less than it was a year ago.

·      67.9% say their digital spend goes toward online display followed closely by social media and PPC/Search/SEM/SEO.

·      32.7% point to client spending as their largest challenge this year.

For more information, visit STRATA here.