A new report out by PQ Media defines, sizes and forecasts advertising within the alternative media sector.
Blog, podcast and RSS advertising are the fastest growing segments of the alternative media industry, as combined spending surged 198.4 percent to $20.4 million in 2005, according to a new report by custom media researcher PQ Media. Aggregate spending on the three alternative media segments is projected to grow another 144.9 percent to $49.8 million in 2006, the report found.
But while blog advertising accounted for $16.6 million, or 81.4 percent of total spending on user-generated online media in 2005, podcast advertising is expected to be a larger market by 2010, according to Blog, Podcast and RSS Advertising Outlook, the first of five installments in PQ Media's Alternative Media Research series. The culmination of more than six months of primary research, this series is the first source to define, size and forecast the burgeoning alternative media sector.
Podcast advertising is projected to grow at a compound annual rate of 154.4 percent to $327 million in 2010, while blog ad spending will rise 78.4 percent to $300.4 million in the same time frame. Key factors driving the growth of podcast over blog advertising are the medium's audio and visual components, as well as the reluctance of some marketers to advertise near non-favorable content. Meanwhile, RSS advertising, non-existent until mid-2005, generated $650,000 in 2005 and is projected to grow to $129.6 million in 2010.
"Blog, podcast and RSS advertising are being driven by some of the same factors boosting the growth of the overall alternative media sector: continued audience fragmentation, the perceived ineffectiveness of traditional advertising, and the elusive but coveted 18- to 34-year-old demographic," says Patrick Quinn, president of PQ Media. "Blog, podcast and RSS advertising have demonstrated an ability to reach younger demographics as well as influentials, and the media tend to be highly engaging. These are attractive trends to brand marketers that are focused on return on investment."
Technology, auto and media brands are the most active in user-generated media advertising, accounting for more than half of total advertising spending in 2005, the report stated, with the food and beverage and apparel categories rounding out the top five. Technology, auto and media categories will continue to generate more than half of all advertising in 2010, PQ Media says.
The relatively small size of these markets is an indication of the newness of the media, the lack of standard metrics and various technology issues, says Quinn. "As advertising networks become more effective, user engagement escalates, and the industry works through its technology and measurement issues, we expect user-generated media to grow at triple-digit rates over the next five years," he adds.
Total spending on user-generated online media is forecast to grow at a compound annual rate of 106.1 percent from 2005 to 2010, reaching $757.0 million in 2010, according to the report. By comparison, the overall alternative media industry, including branded entertainment, digital out-of-home advertising, and mobile marketing, among others, is projected to grow at a compound annual rate of 14.8 percent in the five-year period to $253.7 billion in 2010.
PQ Media's Alternative Media Research Series will also include reports covering all 22 segments of the alternative advertising and marketing industry, such as the first report to size and forecast the global market for branded entertainment in June. These publications are available through PQ Media’s website.
Additional resources:
An executive summary of Blog, Podcast and RSS Advertising Outlook is available online.
PQ Media is a provider of alternative advertising and marketing research. The firm also delivers exclusive data and information on traditional media, including advertising, marketing services, consumer and business media and media usage. Founded in 2002, PQ Media has two major practice areas through which it provides custom and syndicated research to major marketers, agencies, media companies and financial institutions.