Ad Agency Use of Microstock Rising

Posted on 11/8/2007 by Jim Pickerell | Printable Version | Comments (0)

Microstock sellers insist they are focused on developing an entirely new market -- the SOHO (small office, home office) buyer -- that has been, for the most part, ignored by traditional sellers who charge much more for image use than SOHO buyers can afford. There is no question that the vast majority of microstock customers fit this category.

As mentioned in yesterday’s Selling Stock report, the recent Piper Jaffray survey points to another, possibly unintended, consequence of the availability of quality imagery to everyone at microstock prices. Let's take a more in-depth look at the stock industry's most lucrative buyer segment: advertising agencies.

Piper Jaffray surveyed traditional stock photo customers to get an understanding of how microstock might be affecting their purchasing patterns. Of the respondents, 201 or 47% were advertising agencies. In the past such organizations have had the largest budgets for stock photography and are the last buyers anyone expected to be attracted to cheap photos.

I asked Piper Jaffray to break out the numbers for the advertising agency segment of survey respondents to see if their answers differed markedly from the overall averages.
Of the advertising agencies, 42% said they had increased their usage in the last six month, while an additional 34% also using microstock said their level of usage hasn't changed. Only 23% of respondents still have not used microstock.

Only 59% of the 429 respondents to the survey said they used microstock, so the 76% for advertising agencies is a significantly higher percentage that the overall average for all traditional users.

As to anticipated 2008 microstock use, 46% of advertising agencies expect to increase their use over 2007 levels and an additional 25% will continue to use microstock at their current levels. This compares with 68% of all survey respondents who expect to increase microstock usage in 2008 -- indicating that other categories of traditional image users will increase their microstock use at an even faster pace than advertising agencies in 2008.

When asked if they had decreased their usage of traditional RF as a result of increased usage of microstock, 33% of advertising agencies said Yes, 31% said No and 16% said there was No Change.

Advertising agencies used to pay hundreds of dollars for the images they needed for their projects. Now they can get some of what they need (we have no way to judge the percentage of total use) for $2 to $10. There is no indication that these lower prices are resulting in a significant increase in the number of stock photos licensed. In fact, Getty Images statistics indicate that they licensed rights to 8% to 10% fewer images at traditional prices in the first three quarters of 2007 than they licensed in the same period in 2006. (In 2007 Getty stopped providing average-license-fees for RM and RF, so some extrapolation was required to arrive at these percentage figures.)

If the most discriminating customers can already find much of what they need in microstock, and the quality and variety of microstock imagery continues to improve, the long-term future for images that are only available at traditional prices is not bright.

However, other surveys indicate that overall advertising agency photo budgets have not been declining and are actually increasing slightly. One possible explanation for this is that the agencies have taken the money saved on the purchase of stock photography and are using it to fund assignment shoots. This doesn't mean that assignment photographers are earning more, because certainly the production costs for assignment photography has been increasing and such costs could easily be eating up the savings from stock photography.

Interestingly, traditional sellers are not the only losers. Microstock sellers and photographers are also big losers. Microstock sellers have been unable to structure usage fees in a way that allows them to offer images to their SOHO customers at the low prices these customers can afford while still charging advertising agencies much higher usage fees based on the value the agencies receive from the usage. As a result the microstock sellers have chosen to leave huge amounts of money on the table.

Copyright © 2007 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to:  


Be the first to comment below.

Post Comment

Please log in or create an account to post comments.

Stay Connected

Sign up to receive email notification when new stories are posted.

Follow Us

Free Stuff

Stock Photo Pricing: The Future
In the last two years I have written a lot about stock photo pricing and its downward slide. If you have time over the holidays you may want to review some of these stories as you plan your strategy ...
Read More
Future Of Stock Photography
If you’re a photographer that counts on the licensing of stock images to provide a portion of your annual income the following are a few stories you should read. In the past decade stock photography ...
Read More
Blockchain Stories
The opening session at this year’s CEPIC Congress in Berlin on May 30, 2018 is entitled “Can Blockchain be applied to the Photo Industry?” For those who would like to know more about the existing blo...
Read More
2017 Stories Worth Reviewing
The following are links to some 2017 and early 2018 stories that might be worth reviewing as we move into the new year.
Read More
Stories Related To Stock Photo Pricing
The following are links to stories that deal with stock photo pricing trends. Probably the biggest problem the industry has faced in recent years has been the steady decline in prices for the use of ...
Read More
Stock Photo Prices: The Future
This story is FREE. Feel free to pass it along to anyone interested in licensing their work as stock photography. On October 23rd at the DMLA 2017 Conference in New York there will be a panel discuss...
Read More
Important Stock Photo Industry Issues
Here are links to recent stories that deal with three major issues for the stock photo industry – Revenue Growth Potential, Setting Bottom Line On Pricing and Future Production Sources.
Read More
Recent Stories – Summer 2016
If you’ve been shooting all summer and haven’t had time to keep up with your reading here are links to a few stories you might want to check out as we move into the fall. To begin, be sure to complet...
Read More
Corbis Acquisition by VCG/Getty Images
This story provides links to several stories that relate to the Visual China Group (VCG) acquisition of Corbis and the role Getty Images has been assigned in the transfer of Corbis assets to the Gett...
Read More
Finding The Right Image
Many think search will be solved with better Metadata. While metadata is important, there are limits to how far it can take the customer toward finding the right piece of content. This story provides...
Read More

More from Free Stuff