Branded Content, Mobile to Grow

NEW YORK Two of the fastest-growing media segments over the next five years will be branded entertainment and mobile services, according to a study conducted by private equity firm Veronis Suhler Stevenson. These findings were a part of a larger ad-spend study that focused on the decline of consumer media usage due to the shift towards alternative media strategies. Total communications spending reached a record $885.2 billion, increasing by 6.8 percent in 2006, driven by alternative advertising and marketing as well as institutional spending.Communications spending is forecast to be 6.4 percent in 2007, to $941.7 billion, posting a 6.7 percent compound annual growth rate (CAGR) from 2006 to 2011. Expectations are that communications spending will rise above $1 trillion by 2008 and reach $1.2 trillion in 2011."Clearly, this indicates healthy growth for the industry—it's growing faster than the GNP. But there is a lot of change, depicted by the shift in where the money is going," said Jim Rutherfurd, evp and managing director at VSS. Ad spending on branded entertainment, in an effort to elevate brand images, reached $52.87 billion in 2006 with a CAGR of 13.7 percent between 2001 and 2006. By 2011, that figure will nearly double, projected to reach $101.4 billion, with a CAGR of 13.9 percent from 2006 to 2011, according to research by PQ Media cited in the report. Ad spending on pure-play Internet and mobile services climbed to $31.8 billion with a CAGR of 10.3 percent from 2001 to 2006. Those figures are expected to double, forecasted at $63.2 billion in 2011, with a CAGR of 14.7 percent from 2006 to 2011."Mobile content spending will rise substantially as traditional and pure-play providers make more mobile video content available, and mobile phone technology advancements make downloading video more efficient," according to the report.Consumers Spend Less Time With MediaThe study also found that consumers spent less time with media last year, marking the first overall decline in usage since 1997. Consumers spent an average of 3,350 hours using media in 2006, a 0.5 percent drop from 2005, the study found.The drop in media usage was a result of the continued proliferation of "digital alternatives for news, information and entertainment," according to the study. Consumers spend at least 30 minutes per day sitting watching broadcast or cable television but they only spend five to seven minutes watching user-generated content online.People also are spending more time with "consumer-supported media," such as cable TV and videogames, to the detriment of ad-supported media, including broadcast TV and newspapers. Consumer-supported usage grew 19.8 percent last year, while ad-supported usage fell 6.3 percent.—with Alex WoodsonThis story updates and expands an item posted Aug. 7 with data on the decline in overall media usage.

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Branded Content, Mobile to Grow

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