Strata Survey Finds Less Interest In Spot Radio

A survey of advertising agencies found that 44% of agencies are confident they are getting a good value for their recent online video ad purchases, marking a 43% increase from the previous quarter.

Meanwhile, the number of agencies still unsure about online video ROI declined by 25% within the same time period. The first quarter survey was conducted by Media Software Company STRATA, the leader in media buying and selling software with over $50 billion in ad transactions passing through its systems each year.

Reflecting agency confidence in video advertising ROI, 65% of agencies say they are more interested in streaming video sites like Hulu and YouTube than a year earlier, which is also a 12% increase from the prior quarter. Eighty-two percent report it is very important or important to access online video sites such as YuMe, Videology, or Tremor.

According to the survey, agencies are also finding several benefits to programmatic buying. The biggest benefit to programmatic recorded in the survey is the improved ability to reach a targeted audience (46% of agencies), followed by improved automation/efficiency (40%). In contrast, their biggest fear with programmatic is the lack of transparency into inventory sources (49%).

Joy Baer

“Whether digital video, or other media types, is bought direct or programmatically, the survey is highlighting the critical need of our clients to demonstrate ROI in a much more fragmented marketplace,” said Joy Baer, STRATA President. “And as eyeballs continue to migrate, the pressure to effectively and efficiently recapture that reach is a real challenge and one that we’re embracing.”

Agencies also are seeing steady growth in the ad economy. Forty-five percent of agencies see their business increasing in the first quarter compared to the same time last year. Another 53% project their growth in the first half of 2015 to be better than the second half of 2014. Overall, 81% of agencies see their clients’ budgets staying the same or growing. The biggest concern for agencies is client attraction (25%), which replaced media mix (22%) as the top concern for the first time since 2Q14. Agencies are also hiring as 44% say they plan on adding staff this year.

Other findings include:

• 16% of agencies plan to spend at least a quarter of their budget on paid social advertising, the highest number ever recorded in the STRATA Agency Survey.
• 33% say their interest in spot radio is less than it was last year.
• 46% say they are more interested in streaming/online radio than they were last year and only 16% say they are less interested in that medium than a year ago.
• For the first time in the history of the survey, more agencies are focusing their digital ad spend on search (76%) as compared to online display (75%).