• by Richard Whitman , Columnist, December 21, 2016

The latest STRATA agency survey is out, and things are looking good. The organization's fourth-quarter survey found that 43% of agencies say their business will increase in the first quarter of 2017. Just 11% expect a decrease. In terms of staffing needs, 42% anticipate the need for additional staff next year. Oh and not one agency reported plans to reduce staff. Not that any agency would actually admit it. This contrasts with the second quarter of this year, when the rate of hires was found to have decreased.

When asked what the biggest challenges ahead were, 51% said their biggest concern was expanding client roster, followed by determining the right media mix (22%). Only 13% of agencies felt client retention was their chief concern.

Regarding media focus, the survey found video advertising remains the dominant focus, with 34% of agencies noting their clients' primary focus was local TV & cable. For the first time the survey's history, digital video claimed the second spot, with 27% of agencies responding that it was their primary focus, a 79% increase over the previous year. Display advertising, previously in the second spot, fell to third with 15% reporting it as their clients' main focus.

In terms of which platforms agencies are using in social campaigns, Facebook remains dominant, with 94% planning to use the social network. YouTube, Instagram, and Twitter reclaim their second, third, and fourth spots, respectively. Though Snapchat remains sixth, more than 20% of agencies now plan to use the messaging app, a 58% increase from the second quarter in 2016.

Programmatic is looking good too. Thirty-six percent of agencies report that they will be allocating 10-20% of their budgets to programmatic purchasing, a 33% increase over Q2. Another 27% plan to dedicate 20-40% of their budgets to programmatic, up 43% compared to Q2. The percentage of agencies refraining from  programmatic buying decreased as 24% of agencies report that they will not devote any of their budget to programmatic, a 39% decrease from Q2.

Though just 6% of agencies reported plans to allocate between 26-50% of their budgets to paid social, that's an increase of 321% compared to the first quarter this year. A majority of agencies report that paid social media accounts for the smallest portion of their budget (0-5%), and 18% percent of agencies said it accounted for 11-25% of their budget, an 80% increase over last year.

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