New PQ Media Research: Blog, Podcast, RSS Advertising Grow Fastest Among Alternative Media, Surging 198% in 2005, and Forecast to Grow 145% in 2006 Study Finds Podcast Advertising Will Be Larger Than Blog Market by 2010

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Combined U.S. spending on blog, podcast and RSS advertising bolted 198.4% to $20.4 million in 2005, and is expected to grow another 144.9% to $49.8 million in 2006, according to exclusive research released today by PQ Media, a custom media research firm.

As advertising networks become more effective, user engagement escalates, and the industry works through its technology and measurement challenges, we expect user-generated media to grow at triple-digit rates over the next five years

Stamford, Conn., April 11, 2006 – Combined spending on blog, podcast and RSS advertising bolted 198.4% to $20.4 million in 2005, and is expected to grow another 144.9% to $49.8 million in 2006, according to exclusive research released today by PQ Media, a custom media research firm. But podcast advertising, nonexistent until 2004, is expected to be a larger market than blog advertising by 2010, according to Blog, Podcast and RSS Advertising Outlook, the first of five installments in PQ Media’s Alternative Media Research series. This groundbreaking series, the culmination of more than six months of primary research, is the first source to define, size and structure the burgeoning alternative media sector.

Blog advertising accounted for 81.4%, or $16.6 million, of total 2005 spending on blog, podcast and RSS advertising, collectively known as user-generated online media. But the blog segment will comprise only 39.7%, or $300.4 million, of overall expenditures in 2010. Podcast advertising, meanwhile, reached $3.1 million in 2005, and is projected to grow at a compound annual rate of 154.4% to $327.0 million in 2010, when it will be a larger market than blog advertising. RSS advertising, non-existent until mid-2005, generated $650,000 in 2005.

“Blog, podcast and RSS advertising are being driven by some of the same factors boosting the growth of the overall alternative media sector: continued audience fragmentation, the perceived ineffectiveness of traditional advertising, and the elusive but coveted 18-to-34-year-old demographic,” said Patrick Quinn, president of PQ Media. “Blog, podcast and RSS advertising have demonstrated an ability to reach younger demographics as well as influentials, and the media tend to be highly engaging. These are attractive trends to brand marketers that are focused on return on investment.”

The relatively small size of these markets is an indication of the newness of the media, the lack of standard metrics and various technology issues, Quinn added. “As advertising networks become more effective, user engagement escalates, and the industry works through its technology and measurement challenges, we expect user-generated media to grow at triple-digit rates over the next five years,” said Quinn.

Technology, auto and media brands are the most active in user-generated media advertising, accounting for more than half of total advertising spending in 2005, with the food & beverage and apparel categories rounding out the top five. The technology, auto and media categories will continue to generate more than half of all advertising in 2010.

Total spending on user-generated online media is forecast to grow at a compound annual rate of 106.1% from 2005 to 2010, reaching $757.0 million in 2010, according to Blog, Podcast and RSS Advertising Outlook. By comparison, the overall alternative media industry including, among others, markets such as branded entertainment, digital out-of-home advertising, mobile marketing and video-on-demand marketing, is projected to grow at a compound annual rate of 14.8% in the five-year period to $253.7 billion in 2010.

PQ Media’s Alternative Media Research Series will also include reports covering the overall alternative advertising and marketing industry, including all 22 alternative media segments, and the first report to size and forecast the global market for branded entertainment, among others. These publications are available solely through PQ Media’s website at http://www.pqmedia.com. An executive summary of Blog, Podcast and RSS Advertising Outlook is available online at http://www.pqmedia.com/blog-podcast-rss-advertising.html.

PQ Media is the world’s leading provider of alternative advertising and marketing research. The firm also delivers exclusive data and information on traditional media, including advertising, marketing services, consumer and business media, and media usage. Founded in 2002, PQ Media has two major practice areas through which we provide custom and syndicated research to brand marketers, media buyers, media companies and financial institutions. PQ Media is located at Two Stamford Landing, Suite 100, Stamford, CT 06902. Phone is 203-921-0368; Fax, 203- 921-0367; E-mail, info@pqmedia.com.

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