Report Projects Rapid Increases in Adspend on Alternative Media

STAMFORD, March 26:
Advertising spending on alternative media, including online, mobile and digital
out-of-home platforms, is expected to grow 20.2 percent to $88.24 billion in
2008, according to PQ Media, with a compound annual growth of 17 percent to
reach $160.82 billion by 2012.

Spending on alternative
media jumped 22 percent to $73.43 billion in 2007, with a compound annual
growth rate of 21.7 percent from 2002 to 2007. The transition to alternative
media comes as brand marketers cope with the challenges posed by new
technology, changing consumer behaviors, media fragmentation and multitasking.

The report, PQ Media
Alternative Media Forecast: 2008-2012,
found that alternative media, including 18 digital and nontraditional media
segments, accounted for 16.1 percent of total advertising and marketing
spending in 2007, up from only 7.9 percent in 2002. Alternative media is
forecast to represent 26.6 percent of total U.S. advertising and marketing
spending in 2012.

The segments expected to
drive this growth are user-generated content, mobile advertising, video-game
advertising, online-video advertising, word-of-mouth marketing, advergaming and
webisodes, product placement, search and lead generation advertising and
digital out-of home media. The largest alternative media segments in 2007 were
event sponsorships and marketing, search and lead generation, e-direct
marketing, online classifieds and displays, local pay TV and product placement.

Spending on online and
mobile advertising rose 29.1 percent to $29.94 billion in 2007 and increased at
a CAGR of 31.4 percent in the 2002-2007 period. Spending on entertainment and
digital out-of-home advertising, including local pay TV, digital out-of-home media,
VOD, interactive TV and digital-video-recorder advertising, video-game and
home-video advertising, rose 16.2 percent to $9.28 billion in 2007, and climbed
at a CAGR of 15 percent from 2002 to 2007.

Spending on alternative
marketing, including branded entertainment and interactive marketing, rose 17.9
percent to $34.21 billion in 2007, and posted a CAGR of 17.5 percent in the
2002-2007 period.

Spending on branded
entertainment marketing, including event sponsorship, paid product placement
and advergaming and webisodes, rose 14.7 percent to $22.3 billion in 2007, and
climbed at a CAGR of 13.4 percent from 2002 to 2007.

“By 2012, we anticipate
one out of every four dollars spent on advertising and marketing will be
earmarked for alternative media,” said Patrick Quinn, the president and CEO of
PQ Media. “Alternative advertising and marketing media are driving a new media
order that presents vast opportunities for industry stakeholders, but also key
challenges for some of the fastest-growing digital-media segments.
Technological advances have led to critical changes in consumer behaviors and
media usage patterns, which have pushed the advertising and marketing
ecosystems into a seminal period of transition. Driven by these market forces,
brand marketers are seeking new strategies to connect with consumers through
engaging means in captive locations, while at the same time providing
proof-of-performance metrics. This confluence of trends is fueling the
migration of dollars to alternative media.”

—By Mansha Daswani