Boom Times Ahead for Electronic Content: Forecast Study

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In 1927's "The Jazz Singer," Al Jolson addressed movie audiences and uttered the famous line "Wait a minute, wait a minute. You ain't heard nothin' yet!" While the line was introducing a musical number in the film, it has been linked with the first full-length Hollywood "talkie" – a movie with a spoken audio soundtrack.

It's a line that could also be applied to online content delivery. According to one forecast study, advertising spending on blogs, podcasts and RSS feeds, which in 2005 amounted to just over $20 million, is set to explode. As consumers become more comfortable with accessing content through these channels – and the technology to do so becomes ubiquitous – ad spending should reach nearly three-quarters of a billion dollars by 2010.

The good times are channel-agnostic, according to Veronis Suhler Steveson's Communications Industry Forecast. In 2005, marketers spent $16.6 million on blog advertising, a figure which will rise to $300.4 million by 2010. Podcast spots, which generated $3.1 million last year, should see $327 million in spending by then. And RSS feeds, which pulled in $700,000 in 2005 – the first year this channel was measured – should generate $129.6 million.

On a larger level, traditional media companies are embracing a variety of electronically delivered content. Between downloaded music, newspaper Web sites, e-books, cable network mobile marketing and Internet radio (all of which were lumped together), paid content generated $20.28 billion in 2005, and should reach $46.6 billion in 2010.

Much of this growth is coming from the business-to-business sector. The study cites the difference in how B-to-B marketers have been faster to embrace electronic content dissemination than their consumer brethren. For instance, consumer magazines spent only $302 million on it in 2005, compared with B-to-B publications, which shelled out $1.87 billion.

Why the discrepancy? Well, B-to-B's embrace was largely spurred by the medium's ability to generate leads at low cost, and offer a chance to measure return on investment. According to the study, "Magazine publishers were slow to adopt the Internet as part of their business models and they have yet to define a clear strategy for generating revenues from this medium. As a result, consumer magazine e-media spending during the forecast period will remain a small fraction of total spending, far behind that of traditional media."

Another high-potential area is custom e-publications, which generated $3.3 billion in spending – or nearly 12% of all custom publishing expenditures — during 2005. This will more than double to $7.2 billion by 2010, according to Veronis Suhler.


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by Patricia Odell

Campaign: Arby’s Meat Mountain Client: Arby’s Agency: Alcone