Show Me the (USG) Money!

In the wake of all the talk involving about Shyftr and its service that pulls content and the conversation from blogs, there was some discussion about monetization. For people interested in make money, Shyftr and its ilk are bad; for people more interested in building brand and distribution, Shyftr’s doing nothing wrong.

But let’s put aside Shyftr and the issue about whether blogs will slowly see their traffic erode as consumers read content in a variety of external places. Instead, let’s focus on the money. In particular, let’s focus on advertising dollars attracted by user-generated content makers (bloggers, podcasters, video-bloggers).

Before we do that, let’s look at some bullish sexy numbers from eMarketer (aka The New Forrester Research of Web 2.0). According to eMarketer, the number of USG creators in the U.S. will jump to 108 million by 2012 from 77 million in 2008. Meanwhile, the number of consumers using UGC will climb to 130 million from 94 million.

Impressive numbers. More impressive – and somewhat hard to swallow – is eMarketer’s contention that UGC advertising revenue will jump nearly four-fold to $824-million from $162-million.

So let me get my fact straight: While there will be a lot more UGC consumers, there will also be significantly more competition at a time when content is going to be more widely dispersed. At the very least, that sounds like a challenge environment for advertisers and content producers seeking advertising.

The way it looks from here, the major brands (traditional media moving online, and online players with significant footprints) are going to attract a vast majority of the advertising dollars, while everyone else will scramble for a tiny crumb from the UGC ad pie.

Update: Louis Gray has a post suggesting that most bloggers don’t deserve any ad revenue because they don’t attract enough traffic to be valuable to advertisers. Still, you can’t blame people for trying because what’s wrong with trying to make a few bucks from all your hard work. That’s just capitalism, baby!

Technorati Tags: Advertising, Blogs