-By Gail Schiller, The Hollywood Reporter

NEW YORK Spending on alternative media rose 22 percent to $73.4 billion in 2007 and is forecast to grow another 20 percent to more than $88 billion in 2008 despite a sluggish economy, according to new research released Wednesday by PQ Media.

Alternative media, including 18 digital and nontraditional media segments, accounted for 16 percent of total advertising and marketing spending in 2007, up from nearly 8 percent in 2002. But by 2012, it is forecast to represent about 27 percent of total U.S. advertising and marketing spend, PQ Media said.

"By 2012, we anticipate one out of every $4 spent on advertising and marketing will be earmarked for alternative media," PQ Media president and CEO Patrick Quinn said. "Technological advances have led to critical changes in consumer behaviors and media-usage patterns, which have pushed the advertising and marketing ecosystems into a seminal period of transition. Driven by these market forces, brand marketers are seeking new strategies to connect with consumers through engaging means in captive locations while at the same time providing proof-of-performance metrics. This confluence of trends is fueling the migration of dollars to alternative media."

According to the research report, titled "PQ Media Alternative Media Forecast: 2008-2012," alternative media is expected to post a compound annual growth rate of 17 percent in the 2007-12 period, reaching $160.8 billion.

The largest alternative media segments in 2007 were event sponsorships and marketing, search and lead generation, e-direct marketing, online classifieds and displays, local pay TV and product placement.
 
While all 18 segments of PQ Media's alternative media matrix posted double-digit growth in 2007, 12 grew faster than 20 percent for the year and are projected to drive growth during the next five years. Those segments in order of projected growth include consumer-generated media, mobile advertising, video game advertising, online video advertising, word-of-mouth marketing, advergaming, Webisodes, product placement, search and lead generation advertising and digital out-of-home media.