Social Media is the New Standard for Emerging Online Advertising

This blog is about the cutting edge of technology and social media. It is often overlooked by the social media experts who are just now approaching the cutting edge. I’ve seen that the best social media consultants just don’t understand what social media is? To fully understand social media you have to look at the trends within Internet Infrastructure side of web 2.0 – collaborative filtering, software search tools, viral sharing, measurement. Most social media experts come from a PR background – not that there is anything wrong with that. I have yet to meet a PR person who can really nail the value of social media.

Forget all about that infrastructure stuff for now – just look at the numbers. Alternative media is growing fast. source:adage

Alternative media or emerging media or social media is fast becoming the standard in online advertising. Why? Because Web2.0 is about connected relationships with channels of abundant content that is fully measurable.

What the web page was to web1.0 social media is to web2.0.

The numbers are behind it. Below are the highlights from AdAge.

Spending on alternative media hit $73.43 billion in 2007, a 22% increase over the previous year, and will continue to grow, according to PQ Media’s Alternative Media Forecast: 2008-2012, released today. The research firm tracked 18 digital and nontraditional segments, with a combined 16.1% of total advertising and marketing dollars in 2007, up from 7.9% in 2002, yielding a compound annual growth rate of 21.7%.

The forecast predicts a 20.2% increase over the next year, to a total of $88.24 billion, and a compounded annual growth rate of 17% for 2007-2012, reaching $160.82 billion. By then, alternative media will represent 26.6% of all advertising and marketing dollars.

The upswing is as much a result of the effectiveness of new media in a fragmented market as it is from a lack of confidence in traditional media, said PQ Media President Patrick Quinn. “Traditional ad budgets have been going down, but spending has remained stable. This shows where the money is going,” Mr. Quinn said.
Alternative advertising, including online, mobile, entertainment and digital out-of-home advertising, saw spending rise at a compounded annual growth rate 25.8% to $39.22 billion in 2007, accounting for 17.7% of all ad spending that year (compared with 7% of all ad spending in 2002), and grew at a compounded annual growth rate of 26.2% from 2002 to 2007.

Online and mobile advertising spending –including search and lead generation, online classifieds and displays, e-media, online video and rich media, internet yellow pages, consumer-generated ads, and mobile advertising — reached $29.94 billion in 2007 (up 29.1% compared with 2006), a compounded annual growth rate of 31.4% over the 2002-2007 period. The category received heavy infusions from brand marketers trying to reach key demographics that have migrated online and to wireless thanks to wider broadband adoption.

Entertainment and digital out-of-home advertising — including local pay TV, digital out-of-home media, video on demand, interactive TV, and digital video recorder, video game, home video and satellite radio advertising — increased at a compounded annual growth rate of 15% from 2002-2007, and rose 16.2% over the previous year to $9.28 billion in 2007. The growth was driven by rising adoption of entertainment technologies, including ad insertion technologies and ad platforms to reach young audiences.

Alternative marketing — including branded entertainment and interactive marketing — hit $34.21 billion in 2007, a 17.9% rise over the previous year, and grew at a compounded annual growth rate of 17.5% from 2002-2007. This brings its share of total marketing expenditures up to 14.5% in 2007, compared with 8.7% of total spending in 2002.

Branded-entertainment marketing — including event sponsorship and marketing, paid product placement, advergaming and webisodes — also saw and increase of 14.7% to $22.30 billion last year, and climbed at a slower compounded annual growth rate of 13.4% from 2002-2007.

The deployment of new-media strategies focusing on better interactivity, entertainment and engagement than traditional media was the driving factor.

Thanks to strong gains in segments that reach affluent and influential consumers, interactive marketing — including e-direct marketing, word-of-mouth marketing, and e-custom publishing — saw big increases in 2007 of 24.4%, reaching $11.9 billion, compared with the previous year, and a compounded annual growth rate of 28.6% over the 2002-07 period.

Say hello to social media and the upcoming engagement metric.

Author: John

Entrepreneur living in Palo Alto California and the Founder of SiliconANGLE Media

8 thoughts on “Social Media is the New Standard for Emerging Online Advertising”

  1. A bunch of ex marketing valley people left their jobs at sixapart and became the new ‘Social Media consultants”, “ooooh, I specialize in customer engagement via social networks”. This all happened in one year or so. Corporate blogs, white box services, Brand Metrics of CGM (my area of study and consulting for verticals only).

    I have some names I would like to pooh pooh on, but what’s the point. They are well connected to friends in the valley, and get paid for being who they are, not what they deliver – because the model has not been systematized as yet.

    I am taking a stab at really thinking through what the skilled and tech trades and related marketing can do with blogs, facebook, tags, semantic, the whole thing – and I have a slippery grasp on it.

    I think that the aggregators like Friendfeed will have a role to play, in a greatly customized form tailored to the skilled trades, technical services, technical marketing, and knowledge driven industries.

    Then, we shall see if the mission critical use case surfaces, and a real business is born.

  2. Superb post. Being an ad guy I have to say that you are so on point. Most agencies can’t understand what social media advertising is.

    PR people just aren’t strong enough and tend not to have a longer term outlook on how a campaign should run. Internet advertising is about the brand. The campaigns run around that value proposition

  3. Trying new alternatives in marketing show that there is always a need of promotion and advertising unless if you dont want to get lost in the business environment. Keep also in mind, street level promoting and mobile billboard campaigns.

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