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Report: Advertising No Longer King of Content

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For the first time, in 2008, consumers spent more time on media they’d paid for — like cable television and video games — than ad-supported media — like broadcast TV and radio — according to new research from private equity firm Veronis Suhler Stevenson.

Though VSS projects communications spending to decline 1 percent in 2009 to $882.6 billion, in the next five years it should grow 3.6 percent per year, making it the third-fastest growing sector of the U.S. economy after mining and construction.

With revenue declining in areas like print ads, growth is coming elsewhere. The largest and fastest-growing communications category is “institutional end-users,” including business information service, education and training, and business-to-business. That type of spending grew 6.5 percent to $241 billion in 2008.

Other growth areas include subscription television, branded entertainment, and Internet and mobile marketing. Branded entertainment rose 12 percent to $25 billion in 2008, and is expected to rise at a 9.3 percent compound annual growth rate to hit $39 billion in 2013. Further, per the New York Times, paid product placement is expected to have a CAGR until 2013 of 17.6 percent, e-mail marketing, a CAGR of 18.5 percent; in-game advertisements, also of 18.5 percent; mobile advertising outside of texting, 33 percent; paid interactive television gaming, 38.7 percent; mobile advertising and content tied to broadcast television, 35.5 percent; mobile gaming and advertising, 46.2 percent; and Internet and mobile home video downloads, 34.4 percent.