Blogs, Pods and Really Simple Stuff Deliver Advertising At An Increasing Rate

Blogs, Pods and Really Simple Stuff Deliver Advertising At An Increasing Rate

The first installment in PQ Media's Alternative Media Research Series, the Blog, Podcast and RSS Advertising Outlook, reports that advertising spending on user-generated online media - blogs, podcasts and RSS - did not begin until 2002, but this combined spending has grown to $20.4 million by the end or 2005, a 198.4% increase over the 2004 level. Spending on blog, podcast and RSS advertising is projected to climb another 144.9% in 2006 to $49.8 million.

 Some of the key growth drivers are continued audience fragmentation, the perceived ineffectiveness of traditional advertising, and the desire to reach the elusive 18- to 34 year-old demographic.

Other key findings included in the Executive Summary:

• User-generated media remains primarily national in scope with 98.1%, or $20.0 million, of all advertising spending coming from the broader market in 2005
• Advertising networks and click-throughs are the largest ad insertion methods, generating $8.0 million and $7.8 million, respectively
• Blog advertising accounted for 81.4%, or $16.6 million, of total spending on user-generated online media in 2005, but blog ads will comprise only 39.7%, or $300.4 million, of overall spending in 2010
• Podcast advertising totaled only $3.1 million in 2005, but is projected to reach $327.0 million in 2010, when it will account for 43.2% of all user-generated media advertising
• Spending on RSS (Really Simple Syndication) advertising totaled $650,000 in 2005 and will grow to $129.6 million in 2010
• Total spending on user-generated online media is forecast to grow at a compound annual rate of 106.1% from 2005 to 2010, reaching $757.0 million in 2010
• Technology was the largest single category at $4.0 million in 2005, due primarily to the technology-savvy early adopters of user-generated media
• Auto was the second largest marketing category, generating $3.9 million in 2005, as car manufacturers utilized user-generated media to market their higher-end models to the "influential" demographic
• The media industry spent $3.2 million to advertise in user-generated media in 2005, as the industry tried to capitalize on its advanced knowledge of the consumer shift away from traditional media

From a broader alternative media perspective, concludes the report, continued audience fragmentation, the perceived ineffectiveness of traditional advertising, and the desire to reach elusive younger markets are leading more marketers to take a serious look at new media opportunities. In the user-generated media markets, more advertisers are seeing the potential to reach younger demographics, as well as the lucrative influential markets, with media that tend to be highly engaging. On the downside, user-generated media have a host of technology and measurement issues that need to be resolved before these media can reach their full potential.