Interactive Marketing To Garner $77B By 2016


By 2016, advertisers will spend $77 billion on interactive marketing -- or as much as they do on TV today, according to a new report from Forrester Research.

By then, search marketing, display advertising, mobile marketing, email marketing and social media will account for 35% of all ad spending.

"We expect this growth to help firms become adaptive, kill off daily deals, re-emphasize marketing's 'p's,' (product, price, place, and promotion) and turn consumer electronics into audience-targeting tools," says Forrester analyst and report author Shar VanBoskirk.

A number of key factors will enable this growth over the next five years, according to VanBoskirk, chief among them: larger interactive teams for marketers, publishers and service providers.

Over the last three years, for example, one unnamed financial services firm Forrester consulted grew its interactive team from 18 to 70 people. "Now, it is a top advertiser on many display networks, has tripled its email marketing volume, and has a social PR effort underway," VanBoskirk reports.

Along with sustained excitement about emerging media, Forrester also expects marketers to increasingly invest in interactive channels because they will generate better results over time. Furthermore, firms looking to differentiate in the age of the customer will invest to create customized experiences across their customers' preferred touchpoints, Forrester believes.

As a result, Forrester projects that by 2015, smartphone adoption will grow 150%, while 82 million consumers will own a tablet.

That said, digital's rising tide is not guaranteed to continue lifting all boats. For instance, while search will continue as the largest piece of the interactive marketing pie -- growing to more than $33 billion over the next five years -- it will lose share from 55% today to 44% of all interactive spend by 2016, Forrester predicts.

In place of search, marketers will increasingly focus their search marketing strategies on "getting found" by users -- through any medium -- not just search engines. Investment in paid search, search engine optimization agency fees and SEO technology will taper to a 12% compound annual growth rate, according to research.

Representing a boon for display advertising -- investment in contextual listings, static image ads and rich media ads (including pre-roll, mid-roll, and post-roll online video) will reach $27.6 billion by 2016.

All display categories -- except for static image ads -- will post greater than 20% CAGRs, which will boost display to 36% of interactive spend in five years, Forrester boldly predicts.

Also of great significance, spending on mobile paid advertising and search has surpassed email -- and social will rocket to a 38% CAGR or $8.2 billion by 2016. This will be driven by more relevant mobile advertising, increased tablet adoption and mobile commerce.

Forrester is predicting the end of daily deals, as "standing out above the clutter becomes harder for marketers as ad exposures grow."

Added VanBoskirk: "Consumers will grow so conditioned to micro-impulse offers they'll lose practice at considered decisions ... Facing a cultural descent into maladroit judgment, employers (and spouses) will blacklist impulse deals to keep people intentional."

Next story loading loading..