Alternative Media Poised for Strong Growth in ‘08, Despite Slowing Economy

Spending on alternative media in the U.S. jumped 22.0 percent from 2006 levels to reach $73.43 billion in 2007, and that rapid growth is expected to continue in 2008 despite a slowing economy, according to a new report from PQ Media, MarketingCharts writes.

Alternative media, including 18 digital and non-traditional media segments, accounted for 16.1 percent of total advertising and marketing spending in 2007, up from only 7.9 percent in 2002, PQ Media said.

“By 2012, we anticipate one out of every four dollars spent on advertising and marketing will be earmarked for alternative media,” said Patrick Quinn, President and CEO of PQ Media.

Alternative media spending grew at a compound annual rate of 21.7 percent from 2002 to 2007, according to the report, “Alternative Media Forecast: 2008-2012.”

Among the findings:

• PQ Media expects the alternative-media growth momentum to continue in 2008 and through the rest of the decade as brand marketers seek new ways to deal with the evolving media landscape (see chart of U.S. alternative media spending, 2007-2012 - via USA Today):
  • Total spending on alternative media is forecast to grow 20.2 percent to $88.24 billion in 2008 and post compound annual growth of 17.0 percent in the 2007-2012 period, reaching $160.82 billion.
  • Alternative media is forecast to account for 26.6 percent of total U.S. advertising and marketing spending in 2012.
• The largest alternative media segments in 2007 were event sponsorships & marketing, search & lead generation, e-direct marketing, online classifieds & displays, local pay TV, and product placement.
• While all 18 segments of PQ Media’s Alternative Media Matrix - including 12 alternative advertising segments and six alternative marketing segments - posted double-digit growth in 2007, 12 of the 18 segments grew faster than 20% for the year.
• The following segments are projected to drive growth over the next five years (in order of projected growth): consumer-generated media, mobile advertising, videogame advertising, online video advertising, word-of-mouth marketing, advergaming & webisodes, product placement, search & lead-generation advertising, and digital out-of home media.
• Among the segments forecast to grow the most by 2012 (via USA Today):
  • Online search spending is expected to be 113 percent more than 2007 levels and will reach $26.1 billion.
  • Event sponsorship expenditures are expected to reach $33 billion, 72 percent more than last year.
  • E-direct marketing (email and pop-up ads) spend is forecast to reach $22.1 billion, up 121 percent.
  • Online video and rich media spending is expected to be 389 percent more, reaching $12.2 billion.

MarketingCharts has more spending highlights and key trends affecting each major sector and related segments of alternative media.