[From Inside Radio]
As the audio industry continues to expand, ad agencies and their clients are taking notice in the form of greater interest in advertising in both broadcast radio and streaming audio. Over half the agencies (55%) surveyed in the second quarter are more interested in online/streaming audio than they were last year—up 4% from Q1. Also, 14% said they were more interested in spot radio—an 8% rise over last year.
The new numbers are from a second-quarter survey of agencies conducted by advertising software firm Strata.
When asked about their clients’ interest in advertising on broadcast radio, more than two-thirds said it was the same or more than last year, while one-third said less. Just over half of agency execs (53.2%) said their clients’ interest in radio was the same as last year, with 14.3% saying they were more interested and 32.5% saying less.
The survey found even greater interest in advertising on streaming/online radio, such as iHeartRadio and Pandora. Over half (55.1%) said their clients were more interested in advertising on online radio, 35.9% said the same and 9.0% said less.
The audio results come as agencies report that almost half (49%) of clients are making “considerable” or “minor” overall advertising budget cuts, while 31% of budgets will remain flat. One-quarter of agencies say business will decrease in the second half of the year, the highest percentage seen in the survey since the first quarter of 2013. Concerns over client spend spiked by 82% when compared to the same time last year, as 20% of agencies listed it as their biggest challenge this quarter. The leading concern for a majority of agencies (26%) was attracting clients, followed by media mix (21%).
A big headline from the study is that programmatic ad buying is capturing a larger share of ad spend. Fully 12% of agencies 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.
Despite trepidations over the advertising economy, social media ad spend has increased with 69% of agencies devoting between 6%-25% of their budgets to paid social.
Video advertising continues to lead agency focus, as more feel confident in its return on investment potential. The survey found 68% of agencies are using video (both traditional and streaming) as their primary tool; also, 77% of agencies are focused on online/streaming video, the largest amount in survey history.
Strata is used by over 1,200 agencies in the U.S. with over $50 billion in advertising dollars, on average, flowing through its systems per year.