Ad Agencies Are Big Radio Users With Their Eyes On Streaming Video And Social.
Ad agency participants are bigger users of broadcast radio and TV than local direct buyers – 80% of agencies buy broadcast TV and 77% purchase radio, per Borrell’s survey. No other channel placed higher in terms of the number of agencies that buy it, although online banner/display ads were a close third at 76%.
On average, agencies use 11 different types of media. “Digital media, while it's purchased, doesn't really dominate,” CEO Gordon Borrell said during a webinar last week. “These are the marketing masters; they really know the mix of advertising that is required.”
Local ad agencies surveyed by Borrell were as likely to buy digital advertising directly from a buying platform as they were to procure it from a local media seller, such as a broadcast TV station (58%) or radio station (43%). “This was a really interesting finding and it's leading to a conclusion that these agencies really need to marry up with the media companies and vice versa,” said Borrell.
Agencies need to partner with media companies because they are under growing pressure from a rapidly growing throng of independent digital agencies that have sprouted up over the last several years, Borrell explained. Competition is heating up in the local agency world and media agencies are becoming more interested in the marketing expertise that local media companies can bring to the table.
While radio and TV top the list of what they are using now, digital/streaming video and social media are the two channels most ad agencies anticipate increasing. Three in four surveyed plan to up their streaming video/OTT allocation and two thirds expect to invest more in social media. Nearly half (47%) of local agencies are ready to plow more dollars into streaming audio and 39% say they’ll up their radio spend.
The high ranking of digital video and social is a result of heightened client interest coming out of the pandemic, when advertisers pulled back on ad spending and invested in improving their websites, apps, and social media. “And they said, ‘Hey, this stuff works, we're going to keep doing it,’” Borrell offered.
Here’s more evidence that local ad agencies crave streaming video: YouTube, TikTok and Snapchat – all video-centric platforms – had the largest year-over-year usage increases among agency respondents who use them.
Borrell’s spring 2022 survey of agencies and direct ad buyers was fielded from March – May 2022. It included 1,920 direct buyers, who had an average gross revenue of $3.3 million and allocated 5% of their revenue to advertising; and 498 local ad agency participants with an average $3.7 million in client revenues, who also invested 5% of their revenue in advertising.