• by Nina Lentini  @Nina_Lentini, August 7, 2007

Alternative media is becoming more mainstream for brand marketers desperate to capture the attention of increasingly distracted consumers.

The result? In 2006, total spending on advertising was driven by increased spending on Internet, mobile and alternative out-of-home, with a soupcon of political campaign spending thrown in for good measure, finds a new study by Veronis Suhler Stevenson Communications, a private equity firm that invests capital funds in the media, communications, information and education industries in North America and Europe.

Total spending on advertising grew 5.7% in '06, to $209.74 billion.

Overall ad spend rose at a compound annual growth rate (CAGR) of 4.5% from 2001 to 2006, propelled by many of the same drivers such as the migration to Internet search and online video advertising, as well as strong gains in cable, satellite & Regional Bell Operating Company (RBOC) television advertising, out-of-home media and video game advertising.

Other key findings:

• National advertising outperformed local advertising in '06--rising 8.2% compared with 3.5% for local advertising, primarily driven by the alternative media market that caters mainly to national brand marketers.
• If pure-play online advertising were combined with advertising on traditional media online platforms, overall Internet advertising would surpass newspapers as the largest advertising medium by '11--reaching $61.98 billion, and posting a 21.2% CAGR during the 2006-2011 period.
• Spending on advertising is expected to grow 4.2% in '07, to $218.45 billion, driven by the alternative media segments. Spending is expected to grow at a CAGR of 5.2% from '06 to '11, reaching $270.69 billion. Alternative advertising's market share will rise to 27.7% by '11, up from the 12.7% share in '06 and 5.4% share in '01.
• Traditional advertising--including print media such as newspapers, magazines and Yellow Pages; broadcast and cable television; broadcast radio; and traditional out-of-home--inched up only 2.4% in '06 to $183.21 billion. Growth was hindered by declines in many print advertising categories, a weak domestic auto market, and decelerating growth in the cable, satellite & RBOC television services segments.
• Alternative advertising--including pure-play online and mobile advertising, Web sites of traditional media, satellite radio, in-video game advertising, and alternative out-of-home media--soared 36.6% in '06, to $26.53 billion. Advertising dollars are migrating at an accelerated pace to media that offer stronger return-on-investment metrics and are not impacted by ad-skipping technology.