Rise in advertising for "user-generated media"

This is the first real research I have seen.

Undoubtedly it is going to show a rise in growth, given its infancy, but media publishers and advertising mavens still stuck in print mode need to take note.

Advertising for blogs, podcasts and RSS, known collectively as user-generated online media, did not begin until 2002, but this combined spending has grown to US$20.4 million by the end or 2005, a 198.4% increase over the 2004 level.

Spending is projected to climb another 144.9% in 2006 to US$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.

The culmination of six months of primary research found that blog, podcast and RSS advertising are the fastest growing segments of the alternative media industry, and it remains primarily national in scope with 98.1%, or $20.0 million, of all advertising spending coming from the broader market.

Blog advertising accounted for 81.4%, or US$16.6 million, of total spending on blog, podcast and RSS advertising in 2005, but will comprise only 39.7% of the total in 2010.

Podcast advertising, meanwhile, reached US$3.1 million in 2005, and is projected to grow at a compound annual rate of 154.4% from 2006 to 2010, when it will be larger than blog advertising.

RSS advertising, non-existent until mid-2005, generated spending of US$650,000 in 2005, but will be the fastest growing segment over the next five years.

Other key findings included in the Executive Summary:

1. Advertising networks and click-throughs are the largest ad insertion methods


2. 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


3. Technology was the largest single category at $4.0 million in 2005, due primarily to the technology-savvy early adopters of user-generated media


4. 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


5. 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

MORE.