Blogs, Podcasts and RSS Are on the Fast Track: Report

(PromoXTRA) Blog, podcast and RSS advertising are among the fastest growing segments in the alternative media industry, accounting for $20.4 million in 2005, according to a new report.

And this year, more brand marketers plan to explore those segments as blog, podcast and RSS advertising is expected to soar another 145% to $49.8 million, according to Blog, Podcast and RSS Advertising Outlook, the new report by Stamford, CT-based custom media research firm PQ Media.

According to the report, blog advertising accounted for 81.4%, or $16.6 million of total 2005 spending in blog, podcast and RSS advertising (also known as user-generated online media). For 2006, the blog market will outshine the podcast and RSS advertising, rising 118% to $36.2 million. It will continue to climb at a compound annual rate of 78.4% to 300.4 million, comprising about 40% by 2010, the report states.

A new blog is created every second, and up to 30 million blogs were operating as of this month, the report found.

Podcast advertising, however, is projected to surpass blog advertising by 2010. The tactic, which totaled $3.1 million in 2005, is expected to jump at a compound annual rate of 154.4% to $327 million in 2010, the report stated. Podcasting, which has been available since 2004, gives brands enhanced audio and video components to attract the 18-34 market. There are more than 25,000 active podcasts, more than twice the number operating in 2005, the report said.

For its share, RSS (real-time simple syndication or rich site summary)—almost non-existent until the middle of 2005, generated $650,000 last year, according to the report. RSS advertising is projected to grow to $129.6 million in 2010, it said.

“Alternative media have really made these [segments] more attractive to brand marketers,” says Patrick Quinn, president of PQ Media. “It tends to be a highly engaging media that some of the more coveted demographics (18-34)…and influentials are moving toward.”

Technology, auto and media brands are the most active in user-generated media advertising and account for more than half of total advertising spending in 2005, the report stated. Food and beverage and apparel categories round out the top five, it says. Technology, auto and media categories will continue to generate more than half of all advertising in 2010, PQ Media said.

Contributing to the small size of this market is a lack of standard metrics and various technology issues, Quinn says. But as more brand marketers test the waters and learn new details about their return on investment, user-generated media is expected to grow at triple-digit rates over the next five years, he said.

Factors leading brands to consider new media tactics include continued audience fragmentation, the perceived ineffectiveness of traditional advertising and the desire to reach younger markets.

“Some brands are willing to take the risk with metrics,” Quinn observes. “It shows the real willingness of major brand marketers, the skepticism they have in traditional media, to go ahead and shift dollars to alternative media.

And as marketers see some success, these triple digit growth rates will continue.” Total spending on user-generated online media is projected to grow at a compound annual rate of 106% to $757 million over a five-year period (2005-2010), the report said. In comparison, the overall alternative media industry including, branded entertainment, digital out-of-home advertising, mobile marketing and video-on-demand marketing, is projected to grow at a compound annual rate of about 15% in that same five-year period to $253.7 billion in 2010, it said.

The report is the first of five installments as part of PQ Media’s Alternative Media Research Series. The series, the result of more than six months of research, is based on interviews and surveys of dozens of executives, brand marketers, media buying agencies and financial institutions, among others. The report is the first to define, size and categorize the alternative media sector.

The Alternative Media Research Series will also include reports covering the overall alternative advertising and marketing industry, including 22 alternative media segments. An executive summary of the study is available at PQMedia.com/blog-podcast-rss-advertising.html.