Alternative Media Spending Rises to $53 Billion in Q1: Report

By Jun 28, 2006

Spending on alternative media strategies rose 16.4% in the first half of 2006 to an estimated $53.4 billion thanks to continued audience fragmentation and a growing shift from traditional media, according to a new report.

The report, Alternative Advertising & Marketing Outlook 2006, flags double-digit increases in a majority of 23 sub-segments of alternative media, including advergaming, podcasts, blogs, user generated content, video advertising, mobile marketing and product placement. Developed by Stamford, CT-based custom media research firm by PQ Media, the report is the second of five installments as part of PQ Media’s Alternative Media Research series; it is the first to define, size and forecast the alternative media industry.

Patrick Quinn, president of PQ Media, said the increase is due to the growing desire by industry executives’ to reach consumers through alternative media. Brand marketers are willing to shift their media dollars from conventional media (think TV spots and print ads) to newer media that uses digital technology in part to reach younger demographics (mostly males 18-34), he said. In return, marketers are looking for a better measure of return on investment.

“Industry executives said in general, they are more focused than ever on new, emerging new media [strategies],” Quinn said. “There’s not a lot of data showing their effectiveness, yet still major marketers are willing to take their chances on it. It shows they are taking some risks.”

Branded entertainment, which PQ Media defines as product placement, event marketing, event sponsorship, Webisodes and advergaming, represents the largest segment of alternative media. That category is expected to grow 15.5% to $51.6 billion this year, according to the report. The value of product placement will reach $5.7 billion by yearend, up 27.6% from 2005, the report states.

The total alternative media spending in 2005 rose 18.8% to $97.7 billion, according to the report. Going forward, that pace is expected to continue for 2006. PQ Media estimates spending on alternative media strategies will grow 18.5% to about $115.8 billion for the full year of 2006, followed by a projected 16.6% increase in 2007 to $135 billion. The alternative advertising sector is projected to grow nearly 20% for 2006, fueled primarily by online advertising, the report states. Alternative marketing, largely driven by mobile and interactive marketing, is projected to rise 17.6% for the year. Mobile and interactive marketing is expected to rise by 25.1% to nearly $15 billion this year, according to the report.

An executive summary of the Alternative Advertising & Marketing Outlook 2006 study is available at PQMedia.com/alternative-advertising-marketing.html. PQ Media plans to release its 2006 Global Branded Entertainment Forecast on Aug. 1.

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