The value of us

The Center for Media Research reveals that ad spending on citizens’ media (aka user-generated content, ugh) is doing the hockey-stick:

…[A]dvertising spending on user-generated online media – blogs, podcasts and RSS – did not begin until 2002, but this combined spending has grown to $20.4 million by the end or 2005, a 198.4% increase over the 2004 level. Spending on blog, podcast and RSS advertising is projected to climb another 144.9% in 2006 to $49.8 million. Some of the key growth drivers are continued audience fragmentation, the perceived ineffectiveness of traditional advertising, and the desire to reach the elusive 18- to 34 year-old demographic.

Some key findings:

* User-generated media remains primarily national in scope with 98.1%, or $20.0 million, of all advertising spending coming from the broader market in 2005.

I predict that the next phase will have local and nicheier content growing as the infrastructure for advertising on them gets easier and as smaller advertisers discover and learn about the opportunty.

* Blog advertising accounted for 81.4%, or $16.6 million, of total spending on user-generated online media in 2005, but blog ads will comprise only 39.7%, or $300.4 million, of overall spending in 2010

… as other citizens’ media — podcasts, vlogs, wiki products, and things not yet invented — grow. Witness:

* Podcast advertising totaled only $3.1 million in 2005, but is projected to reach $327.0 million in 2010, when it will account for 43.2% of all user-generated media advertising
* Spending on RSS (Really Simple Syndication) advertising totaled $650,000 in 2005 and will grow to $129.6 million 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
* Technology was the largest single category at $4.0 million in 2005, due primarily to the technology-savvy early adopters of user-generated media
* Auto was the second largest marketing category, generating $3.9 million in 2005, as car manufacturers utilized user-generated media to market their higher-end models to the “influential” demographic…

[via MIT Advertising Lab]

Here’s my latest Guardian column pushing the idea of an open ad marketplace to support and explode citizens’ media. Much more on this later.

  • I read the column. Liked it a lot.

    What sort of blogs (meaning, what sorts of content) do you think will fare best under an open market, as opposed to the blogs using some combination of Adsense/Chitika/Commission Junction nowadays to generate revenue? Does an open market favor or disfavor those who don’t want to stick tons of ads on their blogs to make a decent profit?

  • Frank

    Off topic, but does anyone actually think they’ll pass a “nude negro law” down in Florida?

  • afsvfan

    google is smart.they’ll fix this .

  • qcontent

    Spot on Jeff.

    Follow the money and then figure out how to get it.

  • I like the idea. I’ve been writing lately about open-source news filtering algorithms.
    The idea being that if we are to trust an algorithm to filter our news in this growing mass of content, it better be open source, or else we are trading one closed distribution model, the press, for another, an algorithm.
    I believe so strongly in the idea that I’m starting an open source news memetracker at (also check and really think it would make sense to incorporate an open source ad platform as well into the project.
    I don’t think it’s a matter of will this happen, just when, and how long it will take to displace the incumbent closed solutions.

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