Friday, May 05, 2006

UGC - The Advertising Opportunity

Here are some interesting stats on the future of advertising in UGC...

- Advertising on user-generated content (e.g. blogs, podcasts, RSS) grew 198.4 percent to $20.4 million in 2005 This trend did not even start until 2002

- Projected 2006 growth of 144.9 percent to $49.8 million

- Growth drivers = fragmented audience, apparent ineffectiveness of traditional advertising, 18 to 34 year-old demographic

- Largest categories: technology ($4.0 million in 2005), autos ($3.9 million), and media ($3.2 million)

source: PQ Media’s Alternative Media Research Series,

Pepsi and MySpace - Ads go to UGC

The flood gates are starting to open...

MySpace Opens Door to Sierra Mist, Advertising Floodgates

Pepsi-Cola has recently joined a handful of advertisers looking to cash in on the runaway popularity of MySpace. According to MediaPost, the company’s Sierra Mist brand will be the exclusive sponsor of MySpace Comedy, a page of original content for the site’s users.
With this deal, only the second full sponsorship agreement they have made, MySpace looks to be finding innovative ways to generate profit from their hugely untapped network of users. Though it ranks right up with the major search engines in traffic, boasting 70 million registered members and counting, the site makes less than many of those with older, more traditional revenue models.

Sierra Mist follows just Aquafina in becoming an exclusive MySpace advertiser, but meanwhile a number of other major brands have used clever means to extol their wares on the site by their own accord. Hamburger-flipper Wendy’s has used a cute mascot and grassroots tactics to garner 100,000 hungry young users on its friends list. Walt Disney Pictures got a little more elaborate in promoting “The Pirates of the Caribbean: Dead Man’s Chest” on MySpace, disseminating an early peek at the movie’s trailer and launching a whole contest through random picks from its friends list.

The move to accept more advertisers also suggests that MySpace is reacting to a year’s worth of terrible publicity in which the site was in numerous cases implicated with the behavior of online sexual predators. Creating more sponsored, edited pages—like MySpace Comedy—could promote a greater sense of safety and more positive activities for MySpace users.