Online Goes Mainstream

To paraphrase Homer Simpson, “interactive marketing — is there anything it can’t do?” Well, yes, and that’s why spending on U.S. digital marketing will make up only 12% of the total ad spend this year. But if the numbers play out as expected by Forrester Research, that budget will grow from $25.6 billion this year to $60 billion by 2014, at which time it will constitute 21% of all spending on marketing.

Forrester includes in its interactive category some channels considered separately in this trend report, such as e-mail, social and mobile marketing. But search marketing will continue to dominate digital spending both this year (at a projected $15.4 billion, or 60% of online marketing spending in 2009) and in the near future ($31.6 billion in 2014, or 57.5% of total spend).

By contrast, the $7.8 billion spent this year by U.S. marketers on display advertising — the graphical banner ads and towers that we’re accustomed to on Web pages, along with the growing repertoire of rich media ads involving audio or video — will account for just over 30% of U.S. interactive spending. That proportion will stay steady through 2014, at which time display ad spending will reach $16.9 billion, in Forrester’s forecast.

In the face of shrinking overall marketing and advertising budgets, the proportion dedicated to interactive has declined much less than other media. Forrester’s take is that marketers have determined that they can get a more cost-efficient bang for their buck in the digital realm. According to Forrester’s vice president and principal analyst Josh Bernoff, 60% of the marketers surveyed for the agency’s 2009 forecast agreed they would increase their interactive budgets by taking dollars from traditional marketing.

And while more than half of those polled said they expected direct mail, TV, print, outdoor and radio to decline in effectiveness or remain flat over the next three years, “well over 70%” predicted that interactive channels generally (including social media, online video and mobile) would become more effective in that same period.

interactive: Who’s Leading Online?

Source: Forrester Research