Advertising on blogs, podcasts and RSS feeds could generate as much as $49.8 million for America's alternative media industry this year, according to a new report.

Confirming the increasing power and commercial potential of independent online media, publisher of the report and media research firm PQ Media estimated that advertising on user-generated media platforms generated around $20.4 million in the US for 2005 but predicted 144.9 per cent growth for 2006.

Blog advertising accounted for 81.4 per cent of that revenue and is expected to rise to $36.2 million for 2006.

Podcasting is a huge growth area and is predicted to begin to outstrip blog advertising and be worth $327 million by 2010. The number of podcasts in the US has doubled since 2005 to more than 25,000.

Advertising in RSS news feeds only became significant in mid-2005 but had generated $650,000 by the end of the year. The sector is expected to grow to £129.6 million in 2010.

Technology, media and automotive brands account for more than half the advertising in user-generated media.

"Blog, podcast and RSS advertising are being driven by some of the same factors boosting the growth of the overall alternative media sector: continued audience fragmentation, the perceived ineffectiveness of traditional advertising, and the elusive but coveted 18 to 34-year-old demographic," said Patrick Quinn, president of PQ Media.

"Blog, podcast and RSS advertising have demonstrated an ability to reach younger demographics as well as influentials, and the media tend to be highly engaging. These are attractive trends to brand marketers that are focused on return on investment."

Mr Quinn said that user-generated media will grow at triple-digit rates over the next five year as technology and measurement techniques improve.

PQ Media's 'Blog, podcast and RSS advertising outlook' is the first of five reports that follow six months' research into alternative media in the US.

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