Some people think weblogs are the next big thing in media with the potential to revolutionize journalism. Others think blogs are just a bunch of baloney, under-edited tripe written by geeks with too much free time. No matter what your opinion, one thing is agreed upon: Blog advertising is beginnning to take off. It, along with other so-called user-generated content, such as podcasts and Real Simple Syndication (RSS), will generate $49.8 million in ad sales this year, according to a report issued today by PQ Media, a Connecticut research firm. That’s up 144.9 percent over 2005, when advertisers spent $20.4 million, and nearly four times the amount spent in 2004. Blogs accounted for $16.6 million of the 2005 total, or 81 percent. But PQ Media estimates that podcast advertising will surpass blogs as the biggest of the three by 2010, going from $3.31 million last year to $327 million in 2010. RSS advertising still lags well behind the other two at $650,000 last year, but it too is expected to grow quickly. Part of the reason for this growth is that the audience for user-generated media is full of influentials and has a high concentration of hard-to-reach adults 18-34. Patrick Quinn, president of PQ Media, talks to Media Life about which advertising categories are embracing user-generated content, why blogs still turn off some advertisers and the actual size of the blog-podcast-RSS audience.

Why will podcast advertising eventually overtake blog advertising?

This needs to be put into context. Podcast advertising won’t become bigger than blog advertising overnight. Spending on podcast advertising won’t be larger than blog advertising until the end of the forecast period in 2010.

The primary drivers that are generating faster growth rates for podcast advertising are, A, the audio and visual components that are inherent in the medium and missing in blogs; B, a higher concentration of the coveted 18-34-year-old market, compared with a higher concentration of influentials in the blog market; and C, marketers’ perception that ad placement is safer on podcasts than blogs, where the possibility exists that advertisements will be placed near confrontational material about the brand or content that is undesirable for the mainstream audience.

How big do you see podcast advertising getting? Does that have the most potential of these three new media segments? Why?

Podcast advertising, which generated $3.31 million in 2005, is expected to grow at a compound annual rate of 154.4 percent from 2005 to 2010, reaching $327 million in 2010. To put that into perspective, the Super Bowl generated over $60 million in just one hour in 2006 [at $5 million per minute), or one-fifth of the overall total for podcast advertising on all sites during the entire year.

Please explain RSS advertising. What is it and why can it benefit advertisers?

RSS advertising is short messages embedded into aggregated feeds of multiple sites. Many in the industry see it as an alternative to email campaigns rather than competition to traditional advertising, as with blog and podcast advertising. The RSS feed has fewer problems with spam than email, which results in higher consumer engagement.

However, there are some technological problems related to RSS feeds that are impacting current growth, related to compatibility issues allowing the ads to be read simultaneously by web sites in the feeds that use different software programs.

What sort of advertisers are most likely to advertise on blogs? Are they also the ones driving podcast and RSS advertising?

Automobile, technology and media marketers are the major advertisers on blogs, and to a lesser degree food & beverage and apparel brands. This differs slightly from podcast and RSS advertising in that the automobile category is not as dominant on podcasts and RSS (ranked fourth and fifth, respectively).

In podcasts, the food & beverage category is ranked higher, and in blogs sports & games is among the leading marketing categories, replacing apparel.

What are the potential pitfalls of blog advertising? That is, the content is obviously sometimes inflammatory. How do advertisers weight the risks versus the benefits of appearing on such a site?

While there are some marketers unwilling to advertise in blogs because of the possibility of being placed near inflammatory comments, most marketers who choose to advertise on blogs see it only as a minor obstacle.

In many instances, the use of ad networks or other ad insertion programs lessens the possibility of an advertisement being placed near objectionable material. As a result, brand marketers now choose not to advertise on a blog much like they do traditional advertising—for example, choosing specific blogs over another akin to choosing a certain magazine over another due to content, like Hustler.

You mention that blogs, podcasts and RSS reach influentials. What sort of people are they, and how important is that when you’re talking about a relatively small audience for those three ad forms to begin with?

Influentials are individuals who are considered social leaders on a given topic, such as a farmer in a given community who seems to have more success with crops and therefore sways others to buy the same seeds.

Blog and podcast hosts with a large following are often considered influentials because of their ability to sway public opinion. Research has been available since the late 1940s, which has been confirmed by recent research on the subject, on the impact of opinion leaders on generating a higher success rate of advertising campaigns that are targeted to these audiences and their followers.

Has anyone put out numbers on just how big the audience is for these user-generated media forms?

There are a number of sources estimating the size of user-generated media, including Technorati, Pew and eMarketer, among others. Most research firms agree that user-generated media doubles in size, both the number of sites and the number of users, approximately every six months.

Concurrently, research also shows that user-generated media are among the most misunderstood media, with many users unaware that they have visited a user-generated site. [The number of] active users, those who visit a site, download a podcast, or aggregate a site within an RSS feed at least once a week, is approximately 3 million to 5 million.

How long will it be before standard metrics are developed to measure them?

The blog industry is head of the podcast and RSS industries in terms of standardizing metrics because it’s been around two to three years longer. Some demographic information is available privately, especially from ad networks for special clients. Advertising metrics in the RSS industry on the other hand doesn’t have enough volume—it hasn’t been collected long enough—to begin placing standards on them.

Will advertisers hold off on buying them because of this?

The answer is twofold. Those marketers who are embedded in the traditional ad models are more hesitant to experiment without better metrics. Other marketers that are quick to follow consumers to new media such as technology are less hesitant to buy in these three user-generated media. What is clear [is that] more are willing to experiment after watching what happened to the recorded music industry and it inability to deal with the migration of consumers online.

Do most advertisers really understand these user-generated media forms, or are they just jumping on them because they’ve been designated hot?

It depends on the marketing category and medium. Those in the blog industry state that they need to spend less time educating media buyers than they did in the past, while RSS sales executives need to spend a large portion of their pitches on education.

Concurrently, technology, media, auto and to a lesser degree apparel, food & beverage and sports & game marketers get it. These marketers have experimented with other alternative media more than marketers in other categories like health & beauty and home & garden.

How satisfied have advertisers who are already using these forms been?

Anecdotal evidence suggests that those that have included user-generated media in their marketing mix are likely to be repeat buyers. As more metric data becomes available, both public and private, the success rate is expected to climb.

Is the growth of user-generated new media advertising better explained by the overall growth in web advertising or simply eagerness to get into a new arena?

Another yes and no answer. Growth in user-generated online media can attribute some of its success to the overall internet market. Marketers have come to expect higher return on investment in metrics from all forms of online advertising. Also, due to the success of other online advertising, especially search, marketers are more willing to experiment with the other fringes on online content, such as user-generated media.

However, each user-generated media offers an attractive alternative to other types of advertising and marketing, as described earlier—the ability to reach influentials [through] blogs, a highly engaged 18-34 market [in] podcasts and spam-free opt-in messages [through] RSS.