SYS-CON MEDIA Authors: Elizabeth White, Liz McMillan, Xenia von Wedel, Peter Silva, Glenn Rossman

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STRATA Agency Survey: Nearly 90% of Agencies Interested in Social Media and Online Video, but Majority Question the Value

-- Agencies Unable to Determine ROI of New Advertising Channels --

CHICAGO, Feb. 19, 2014 /PRNewswire/ -- A recent survey of advertising agencies found that while social media and streaming/online video were major areas of focus for advertisers in the fourth quarter of 2013, the majority of agencies are unsure of the value these channels are delivering to clients. The survey, conducted by STRATA, the leader in media buying and selling software, found that more than 87% of agencies polled were interested in using social media in client campaigns, while 98% said they were either more interested or equally as interested in streaming/online video than they were a year ago.  Given all the new channels available to agencies, it's not surprising that media mix was cited as the second largest concern for agencies, and up 20% since last quarter.

Facebook is still the dominant social media channel for advertisers with 81% of respondents indicating they would use Facebook in their clients' campaigns. On Facebook, respondents were most likely to buy Standard External Website Ads (33%), Promoted Posts (31%) and Page Post Ads (31%). Other popular social channels for agencies include YouTube (57%) and Twitter (48%). Agencies also indicated a big shift in sentiment towards Pinterest, as 35% said they would use the channel, up from just 22% one year ago.  LinkedIn is also gaining popularity with agencies, as 33% of agencies indicated they would consider using it in clients' campaigns. This represents an increase of 56% since last year.

While interest in social media advertising continues to grow at astronomical rates, the value of social media remains in question for advertisers. 54% of respondents said they would buy more social media ad spots if the value was more obvious, and 41% would be more open with a set of changes including an easier process, more obvious effectiveness, lower minimum volumes and less complex targeting.

"In the advertising industry, the buzz often comes before the pay off," said Joy Baer, Executive Vice President of STRATA. "Everyone wants to buy social media and online video because it's the way the industry is heading, but the real ROI is more complex to define.  It's a science that is still being developed."

Online and streaming video and radio also gained popularity with agencies. 65% of respondents say they are more interested in streaming/online video than they were a year ago, and 60% said that they believe an online video impression is equal to a TV impression. While traditional radio continues to experience a drop off (interest in is down 67% since 2010), interest in online/streaming radio is growing tremendously, with 59% of respondents more interested in the medium than they were a year ago. YouTube is the top online video site for clients, with 81% indicating interest, but agencies are expanding the sites they look to for video advertising. 40% indicated an interest in Hulu, followed by Netflix (27%), Instagram Video (19%), and Vine (14%). Only 5% of respondents said they were not interested in online video, down from 15% last quarter.

As online/streaming video grows in popularity, so does skepticism of the value of the new medium. 47% of respondents indicated that they were not sure whether they were getting a good value/ROI on their recent online video purchases, and 12% said they didn't think they were getting a good value.

Regardless of ROI challenges, business is booming for agencies, as 35% indicated that they expect to see in increase in business over the next quarter. Nearly 50% of agencies project that future growth will be better in the first half of 2014, compared to the last half of 2013. This represents the highest level of optimism since inception of the STRATA quarterly survey. Only 7% of respondents indicated that they expect a weak first half of 2013. 43% of agencies plan on hiring staff this year, which is the highest number in three years. Attracting clients is still the biggest challenge for agencies (47%). Concerns over client spending, which agencies have previously cited as a top concern, have dropped dramatically, with only 8% of agencies citing this as their biggest challenge.

ABOUT STRATA
STRATA is the only system provider that connects both media buyers and sellers. The custom solutions supplied by STRATA empower clients to sell and efficiently purchase all media types including cable, broadcast, newspaper, radio, outdoor and digital advertising mediums.  On average, over $50 Billion in advertising dollars flow through STRATA systems per year.

As the system of choice for over 1,000 agencies nationally, STRATA provides media technology that enables organizations to lead rather than react to industry developments.  By transforming the way advertisements are placed and tracked, STRATA adds a new level of transparency to campaigns that is necessary in the ever-evolving media world.

SOURCE STRATA

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