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04/01/2008

Alternative Media Sees Explosive Growth

Spending on so-called alternative media, including social networks, digital out-of-home networks and mobile content, will increase 20.2% to $88 billion in 2008, according to a new study by PQ Media Research. Its first report focusing on alternative media further forecasts that the fast-growing sector will hit nearly $161 billion by 2012, accounting for 26.6% of total U.S. advertising and marketing spending.

PQ Media defines alternative media as: �Media buying strategies that attempt to bypass the clutter of traditional advertising and marketing in an effort to reach target audiences, primarily through new media such as the Internet, but also by using alternative means through traditional media such as product placement in broadcast television.�

The research firm breaks the category into 18 sub-groups. Among those, consumer-generated media, mobile ads, video game ads, word-of-mouth marketing, and webisodes are expected to see the biggest gains in the next five years.

The biggest alternative sub-categories as of last year were event sponsorships and marketing, search and lead generation, e-direct marketing, online classifieds and displays, and local pay TV.

From 2002 to 2007, alternative media grew at an annual rate of 21% to $73 billion, making up 16% of overall ad and marketing dollars. But despite the optimistic outlook, some caveats await marketers rushing to embrace alternative media to boost return on investment. One is to avoid creating more clutter by trying to cut through traditional media congestion.

�A key challenge is riding that line between effective advertising and marketing without annoying consumers to the point where they�re completely turned off,� said Patrick Quinn, president and CEO of PQ Media. Word-of-mouth marketing, mobile media and out-of-home digital advertising are especially susceptible to alienating consumers with overly intrusive advertising.

A looming recession will also contribute to slowing growth for alternative media in the next couple of years, along with a natural slowdown caused by measuring against a larger base of ad revenue.

But Quinn emphasized that long-term factors, such as the desire to reach elusive 18- to 34-year-old males by alternative means, will continue to drive growth in the coming years. Such trends will also make alternative media less subject to cyclical spending patterns than traditional media like TV, radio and print.

But when alternative outlets account for one-in-four ad dollars by 2012, will it still be alternative? �It won't be so alternative then, but others will come along to take their place,� assured Quinn.


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