We all know that online advertising is increase by leaps and bounds year over year and quarter over quarter (roughly 30% a year).  But if you look only at the blog, podcast, and RSS segment (or consumer generated media -- CGM) it increased 198% in 2005 and shooting for 145% in 2006.  This is according to a new report by PQ Media (report intro and press release).

In actual numbers the CGM component is was $20.4 million in 2005 and trending towards $49.8 million this year.  The chart above shows where the dollars are going by category and it reflects overall online spending pretty closely.

The question is, why is the growth so fast and why CGM?  The speed of increase is primarily due to the newness of this media segment.  This is also why there will be a "slow down" in spending 2005 vs 2006.  But why CGM?  Frankly marketers are realizing that CGM is where the audience is.  People who read CGM are at the cutting edge of a lot of areas, and they tend to be better educated and earn more than the general online population.  Bloggers and blog readers tend to be the influencers, the connectors, and if you're looking for an affluent audience ... it just makes sense doesn't it.

For consumer electronics, automobile, and similar advertisers blogs are becoming the places people go to not only chance the latest news, but also reviews and recommendations of products.  Great place to advertise ... or sponsor.  Having your brand associated with a top-notch blog and blogger could be a very good thing.

The one piece missing in all this is that the tools to advertise on blogs are only in their infancy.  The models and techniques are just being proven.  2006 might very well prove to be the beginning of the CGM advertising explosion.

Other references: Marketing VOX -- A Feed is Born

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