Spending on alternative media is expected to see double-digit growth this year, despite a slowing economy, according to a new research by custom media research firm PQ Media.
The report, PQ Media Alternative Media Forecast: 2008-2012, said the industry is projected to grow 20.2% to $88.24 billion in 2008, up from $73.43 billion last year. It will continue to grow at a compound annual rate of 17% from 2007-2012 reaching $160.82 billion in 2012.
The research, to be released today, reports double-digit increases in the segments of alternative media, including event sponsorship and marketing, advergaming and Webisodes, paid product placement, video game advertising, and word-of-mouth marketing. The report is the first to define, size and structure the industry, PQ Media said.
Overall alternative media spending rose at a compound annual rate of 21.7% between 2002 and 2007. Marketers largely looked to the various tactics to offset challenges by changing consumer behaviors, media fragmentation and a growing demand for ROI, the company said.
“Marketers are also seeking new ways to deal with the evolving media landscape that has been changed by new technology,” Patrick Quinn, president and CEO of PQ Media, said. “Technology advances led to critical changes in behavior. Driven by these market forces, marketers and advertisers are seeking new strategies to connect with consumers in engaging means and captive locations.”
Alternative media spending makes up 16% of the total U.S. advertising and marketing spending. By 2012, the category is projected to total 26.6%, according to the report.
Event sponsorship and marketing, search and lead generation, e-direct marketing, online classified and displays, local pay TV and product placement made up the largest alternative media segments last year, the report said.
Spending on branded entertainment, which includes event sponsorship and marketing, paid product placement and advergaming and Webisodes, jumped 14.7% to 22.3 billion in 2007, climbing at a compound annual growth rate of 14.4% between 2002 and 2007. That growth follows the continuing trend of marketers moving away from traditional advertising and traditional mass media, Quinn said.
“There’s lots of money to be moved,” Quinn added. “With things like the writers’ strike, brands are looking to go elsewhere with their money.”
Meanwhile, spending on entertainment and digital out-of-home advertising, which includes local pay TV, digital video recorder advertising, video game and home video advertising, rose 16.2% to $9.28 billion last year, climbing at a compound annual rate of 15% between 2002 to 2007. That segment boomed largely from new ad insertion technologies, and pursuit of new ad platforms to reach young audiences.
For interactive marketing, which includes word-of-mouth marketing, e-direct marketing and e-custom publishing, spending soared 24.4% to $11.91 billion in 2007, while spending on online and mobile advertising (search and lead generation, online classifieds and displays, consumer-generated ads and mobile advertising) rose by 29.1% to $29.94 billion, a compound annual increase of 31.4% over 2002 to 2007.
Over the next five years, consumer-generated media, mobile advertising and video game advertising are the top three segments that are projected to drive growth, PQ Media http://www.PQMedia.com said.
An executive summary of the report is available at PQMedia.com/alternative-media-forecast-2008.html
