Ad Agencies Expect Bigger Budgets, More Digital

Bigger advertising budgets, increased digital ad spend and greater demand for staff are among the 2015 trends boosting ad agencies' expectations for the year, according to a fourth-quarter survey by Strata, a developer of media buying and selling software.

The most recent version of the quarterly Strata Agency Survey found that while TV leads digital as the medium with the most client focus (44% versus 27%), 81% of agencies are more interested in digital advertising than they were a year ago, and 41% of agencies foresee increased digital ad spend as the biggest change to the advertising industry this year.

Digital is only part of an overall increase in advertising budgets, according to the survey, with 35% of the agencies polled saying their clients are increasing their budgets from last year; that's a 50% uptick in expectations from just two years ago. As a result, more than half (53%) of agencies say they expect year-over-year growth from 2014, with 45% reporting they plan to hire additional staff, "the highest percentage ever recorded" for hiring plans in the survey, STRATA said.

Other trends Strata identified in the survey include:

  • Increased confidence that video ads are reaching target audiences: 44% of agencies believe online videos are reaching their intended viewers, a 10% jump from the Q3 2014, while 35% say that happens some of the time, and half of agencies responding they are still unsure if they are getting good value for their online video ad purchases.
  • Greater use of programmatic advertising: 37%of agencies report they will carry out 10-20% of their ad buys programmatically, up 30% from the third quarter; 24% say they trust programmatic buying to properly execute their ad orders, while one-third are still unsure.
  • Facebook and YouTube lead among the social platforms for advertising campaigns: Both reached new all-time highs for ad agencies, with 96% reporting they'll use Facebook and 72% planning to use YouTube; other platforms they intend to use include Twitter (54%), Instagram (27%) and LinkedIn (27%).