Forrester: Interactive Marketing To Grow 11% To $25.6 Billion in 2009

interactive marketing spend graph Forrester Research predicts that interactive marketing spending will hit $25.6 billion this year -- up 11% from $23.1 billion in 2008, despite being flat, as marketers shift money from traditional media to digital channels.

That total, which also includes search, email, social media and mobile marketing dollars, is expected to more than double to nearly $55 billion by 2014. "This growth is due to marketers seeking lower cost, more accountable channels which are also widely used by their customers," wrote Forrester analyst Shar Van Boskirk, in a blog post previewing the firm's interactive spending forecast due out in June.

A recent Forrester survey of more than 200 marketers found that 60% planned to increase interactive budgets by pulling back spending on traditional outlets. The biggest victim of the trend will be direct mail, which stands to be slashed by 40%. Print will not fare much better, with spending on newspapers expected to be cut by 35%, and magazines by 28%.

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By contrast, mobile and social media will enjoy the biggest spending gains in interactive -- increasing nearly 70% to $391 million and almost 60% to $716 million, respectively, in 2009. But the recession's toll on other segments will leave display advertising virtually flat at $7.8 billion, and email up only slightly to $1.2 billion.

Search marketing, which will get a lift from the shift of traditional and online display ad dollars, is expected to grow 14% to $15.4 billion.

A number of market research firms and Wall Street analysts have revised down their estimates of online ad revenue this year as a result of the worsening economy, and are now predicting single-digit growth. Online ad growth fell to 11% last year after recent years of 20% or better gains as the weakening economy finally caught up with Internet spending.

Through 2014, Forrester predicts that interactive marketing will grow 17%, led by social media, projected to grow 34% to $3.1 billion. Mobile will follow, increasing 27% to $1.3 billion; display advertising, 17% to $16.9 billion; search, 15% to $31.6 billion; and email, 11% to $21 billion.

A couple of comments posted to the Forrester forecast preview noted how small the mobile estimate was despite a relatively high projected growth rate. In response, Van Boskirk wrote: "I remain very cynical about mobile." Despite great potential, "the reality is that today marketers aren't embracing it as they are other emerging media, nor are the mechanics of how to use and measure mobile worked out to a degree that will convince mobile naysayers (like me) that it is worth all the effort."

She also noted that only 28% of marketers claim to be using mobile today, and the percentage of firms expecting to adopt mobile this year has actually declined from 2008. For what it's worth, Forrester's mobile prediction of $391 million this year is still higher than the recently revised forecast of $229 million by Interpublic's Magna unit.

2 comments about "Forrester: Interactive Marketing To Grow 11% To $25.6 Billion in 2009".
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  1. Joshua Rex from AP, May 11, 2009 at 9:02 a.m.

    Seems weird to me that email marketing is bigger than display advertising?!

  2. Rich Reader from WOMbuzz, May 11, 2009 at 2:42 p.m.

    Thank you, Mark, for sorting out the view from Forrester. However, the elephant in the online room is still search, which mutes the significance of higher growth rates for the tiniest segments (mobile and social), as if they were rounding errors in the total estimate.

    How about a deeper dig into the $7.8 Billion display advertising to uncover shifts in component shares within that sector (e.g. does it include video ads, flash overlays, ghosts, etc.?). Many of us wouldn't be surprised to find that some emerging component of display advertising has become larger than the whole of social media, regardless of where our own interests might be focused.

    http://richreader.blogspot.com/

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