Ad Agencies Cautious About Spending

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STRATA released its second-quarter survey of advertising agencies on Wednesday, which found that agency budgets remain flat as agencies “see looming headwinds.” The advertising agencies in the study report to STRATA that 49% of clients are making “considerable” or “minor” budget cuts, while 31% of budgets will remain flat. A quarter of the agencies say business will decrease in the second half of the year.

The survey also found that agencies are warming up more to programmatic ad buying. Twelve percent of the agencies in the survey plan on executing 40-60% of their buying programmatically, a 90% increase from a year ago. Another 28% of agencies intend to carry out between 10-20% of business programmatically.

Video advertising is also making big gains with ad agencies. And that’s due to the confidence in the ROI from that medium, according to STRATA. The survey found 68% of agencies are using video (both traditional and streaming) as their primary advertising tool. Seventy-seven percent of agencies are focused on online/streaming video, the largest amount in survey history. Digital video now also leads the digital category, surpassing social as the leading area of focus within the digital category, with 70% of agencies utilizing digital video, up 25% from a year ago, compared to 67% for social.

The survey also found that 55% of agencies say they are more interested in online/streaming audio than they were last year (up 4% from 1Q16). Fourteen percent said they were more interested in spot radio (up 8% from last year).

Read more about the STRATA survey HERE

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