Alternative Media Ad Spending Defies Slowing Economy: PQ Media Report

March 31st, 2008 Nurlan Urazbaev

Spending on alternative media hit $73.43 billion in 2007, a 22% increase over the previous year, and will continue to grow, reports Ad Age, quoting PQ Media’s Alternative Media Forecast: 2008-2012, released last week. 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%, writes Ad Age.

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.

Digital signage, or, ‘digital out-of-home advertising’, as it is called in the report, got a special mention from PQ Media. Here’s an excerpt from Ad Age’s interview:

‘Where the money is going…’
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.

“There is a lack of standards in these new areas,” Mr. Quinn added. “Digital out-of-home advertising is getting recall rates as high as or higher than traditional mediums, but there are few studies on this. They’re going to need more and deeper metrics: The bar is being raised across the board.”

So, researcher Patrick Quinn added his voice to the unanimous acknowledgement of the ‘lack of standards’… This is where our industry stands now. As we wrote in many of our previous posts, the money have started pouring (or rather, trickling) into digital signage advertising even before the standards and metrics are introduced. This is a good sign. However, the danger is that until the metrics are in place:

- digital out-of-home will have a hard time demonstrating its enormous potential and will not get the deserved share of budgets in the media plans soon enough, compared to other, more measured, but not necessarily more effective alternative media.

- lack of ROI measurements and disparity in buying standards may lead to a disappointment of first-time advertisers, who may choose not to repeat their campaigns. It might be hard to win them back for a while.

The ball is in the court of the OVAB and other organizations working on bridging the gap between heterogenous networks and the media buying habits (and stereotypes) of the mainstream advertising community. Rumour has it that OVAB is making good progress in high-level negotiations with advertising trade bodies to agree on the terminology and the currency for buying digital OOH space.  OVAB’s member base has grown rapidly since its launch over a year ago, and it keeps growing, judging by the news coverage.

Entry Filed under: Digital Signage ROI, The Big Picture, Uncategorized