Majority of Agencies Plan to Retain or Increase Staff
A fourth quarter survey of advertising agencies found that agency confidence was on the rise heading into 2017, in line with the reversal of expectations surrounding a Trump presidency. The survey was conducted by STRATA, a Comcast company and leader in media buying and selling, processing over $50 billion in advertising dollars annually.
The survey found not one agency planned to cut staff, which is in line with WPP (WPP.L) CEO Martin Sorrell’s recent statement that the short- to medium-term outlook for the US economy is better than people may have expected. Only a small minority (11%) of survey respondents expect a decrease going into next year.
Echoing Mr. Sorrell’s sentiments that the economic outlook for advertising agencies is strong, Judd Rubin, vice president at STRATA, noted that “Earlier this year, we found that agencies had major concerns about budgets and revenue, but we’re now seeing much more optimism heading into 2017.”
But there’s a departure in outlook for 2017. Where Mr. Sorrell finds that the landscape will look similar to 2016, the survey sees one key difference: the rapidly increasing focus on paid social media. Though only some firms (6%) are allocating between 26-50% of their budgets to social, that’s an over 300% increase from earlier this year. As expected, Facebook (FB) remains the dominant platform for paid social programs, with Youtube, Twitter (TWTR), and Instagram in second, third and fourth, respectively.
The surprise, though, is in the heightened focus on Snapchat. Though the messaging app remains sixth in focus among social platforms, more than 20% of agencies now plan to include it in their paid social programs, a 58% increase from the previous quarter.
The STRATA Agency survey is conducted quarterly and is sent the advertising agencies that STRATA works with, and has a broad focus on agency sentiment around varying segments of the advertising ecosystem. STRATA is used by over 1,000 agencies nationwide.