They get all the hype—and not much of the money
For all the ink—or cyber-ink—that blogs, podcasts and RSS have generated—and all the fees that have been paid to consultants to help marketers figure out how to get their messages in such alternative media, their impact on advertising spending has been virtually nil. In 2005, spending on advertising in blogs, podcasts and RSS (really simple syndication) grew 198.4% to $20.4 million, according to research from PQ Media, a custom media research firm. Such ad spending is expected to grow 145% this year, but still it will reach only $49.8 million. By comparison, a 3-second spot in this year’s Super Bowl broadcast reportedly averaged $2.4 million.
Blog advertising accounted for 81.4%, or $16.6 million, of total 2005 spending on blog, podcast and RSS advertising, which PQ Media calls “user-generated online media.” But the blog segment will comprise only 39.7%, or $300.4 million, of overall expenditures in 2010. Podcast advertising, meanwhile, reached $3.1 million in 2005, and is projected to grow at a compound annual rate of 154.4% to $327 million in 2010, when it will be a larger market than blog advertising. RSS advertising, non-existent until mid-2005, generated $650,000 in 2005.
"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," said 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."
The small size of these markets is an indication of the newness of the media, the lack of standard metrics and various technology issues, Quinn added. "As advertising networks become more effective, user engagement escalates, and the industry works through its technology and measurement challenges, we expect user-generated media to grow at triple-digit rates over the next five years," said Quinn.
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, with the food & beverage and apparel categories rounding out the top five, says PQ Media’s Blog, Podcast and RSS Advertising Outlook. Technology, auto and media categories will continue to generate more than half of all advertising 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, according to Blog, Podcast and RSS Advertising Outlook. By comparison, the overall alternative media industry including, among others, markets such as branded entertainment, digital out-of-home advertising, mobile marketing and video-on-demand marketing, is projected to grow at a compound annual rate of 14.8% in the five-year period to $253.7 billion in 2010.
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