About 94% of US media buying ad agencies expect business conditions to improve or stay the same in the second half (H2) of 2012, according to August survey results from STRATA. Among the agencies surveyed, roughly 40% project growth, while just 7% forecast a decrease in growth in H2. That 7% is the lowest negative sentiment that STRATA has recorded since launching its survey in 2008. The report suggests that as the advertising industry is commonly thought of as a leading indicator for consumer spending, this result may mean that the economy will improve at a faster rate than projected by economists.
Agencies’ optimism is also backed by a solid first half of 2012. STRATA’s Q2 survey reveals that 52% of agencies saw their business increase in Q2 compared to a year earlier, up 12% from Q1. That compares very favorably to Q4 2008 (generally accepted as the start of the current recession), when less than a quarter of agencies reported an increase in ad spending. Also true, and despite high unemployment in the US, 94% of ad agencies plan to either increase staff or hold their current levels.
Those agencies have proved to be cautious but fairly accurate in their predictions. In STRATA’s survey covering Q1, 1 in 5 agencies felt that their business and the economy were in a strong growth period, with another 23% expecting that growth to happen in H2, and one third of agencies planning to add new staff.
STRATA data reveals that political ads boosted sales in Q2 and will continue to do so in Q3. Thus far in 2012, STRATA reports that of the more than $1.2 billion of ad buys moving across its ePort transaction platform, 40% were political advertising. 86% of political advertisers surveyed anticipate increased or steady ad spending this year compared to 2010.
Even as political advertising heightens demand and drives up ad costs, 42% of non-political advertisers claimed they will compete for ad space during the campaign season, while another 40% will use alternative mediums to avoid the political ad costs. Less than a quarter of non-political ad buyers will wait until after the elections to advertise.
Consistent with historic spending during campaign season, TV is still the most common medium for advertising, with 43% of ad agencies customers focused on spot TV. See here for a data dive into TV advertising in the US.
About The Data: The STRATA data is based on an online and telephone survey of over 100 media buying agencies across the US.
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