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

March 26, 2008

This article is included in these additional categories:

Out-of-Home | Radio | Social Media | Technology | Television | Videogames

Spending on alternative media in the US jumped 22.0% 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.

Alternative media, including 18 digital and non-traditional media segments, accounted for 16.1% of total advertising and marketing spending in 2007, up from only 7.9% 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% 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:
    • Total spending on alternative media is forecast to grow 20.2% to $88.24 billion in 2008 and post compound annual growth of 17.0% in the 2007-2012 period, reaching $160.82 billion.
    • Alternative media is forecast to account for 26.6% of total US 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% more than 2007 levels and will reach $26.1 billion.
    • Event sponsorship expenditures are expected to reach $33 billion, 72% more than last year.
    • E-direct marketing (email and pop-up ads) spend is forecast to reach $22.1 billion, up 121%.
    • Online video and rich media spending is expected to be 389% more, reaching $12.2 billion.

Spending highlights and key trends affecting each major sector and related segments of alternative media, according to PQ Media:

  • Alternative advertising, including online & mobile advertising and entertainment & digital out-of-home advertising, climbed 25.8% to $39.22 billion in 2007, and grew at a CAGR of 26.2% in the 2002-2007 period. Alternative advertising accounted for 17.7% of overall ad spend in 2007, up from a 7.0% share in 2002.
  • Online & mobile advertising, including search & lead generation, online classifieds & displays, e-media, online video & rich media, internet yellow pages, consumer-generated ads, and mobile advertising, rose 29.1% to $29.94 billion in 2007, and increased at a CAGR of 31.4% in the 2002-2007 period. Growth was driven by brand marketers’ shifting budgets out of traditional advertising to reach key demographics that have increased online and mobile usage due to improvements in online and wireless technology, particularly with wider adoption of broadband access.
  • Entertainment & digital out-of-home (OOH) advertising, including local pay TV, digital out-of-home media, video-on-demand (VOD), interactive TV (ITV), and digital video recorder (DVR) advertising, videogame & home video advertising, and satellite radio advertising, rose 16.2% to $9.28 billion in 2007, and climbed at a CAGR of 15.0% from 2002 to 2007. Spending was fueled by new ad insertion technologies, the pursuit of new ad platforms that reach young audiences; and the steady growth of local pay TV, satellite radio, and DVRs, subscribers.
  • Alternative marketing, including branded entertainment and interactive marketing, rose 17.9% to $34.21 billion in 2007, and posted a CAGR of 17.5% in the 2002-2007 period. Alternative marketing accounted for 14.5% of total marketing spend in 2007, up from 8.7% in 2002.
  • Branded entertainment marketing, including event sponsorship & marketing, paid product placement, and advergaming & webisodes, rose 14.7% to $22.30 billion in 2007, and climbed at a CAGR of 13.4% from 2002 to 2007. Growth was driven by deployment of media strategies aimed at being more interactive and entertaining than traditional media, as well as to engage target audiences in locations that are not affected by ad-skipping technology.
  • Interactive marketing, including e-direct marketing, word-of-mouth marketing, and e-custom publishing, rose 24.4% to $11.91 billion in 2007, and climbed at a CAGR of 28.6% from 2002 to 2007. Spending was driven by strong gains in segments that reach affluent and influential consumers with focused messages that are either opted in to or come from very trusted sources.

“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,” Quinn said.

“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.”

Note: Chart data via USA Today.

45th Parallel Design Ad

Explore More Charts.

Pin It on Pinterest

Share This