• by May 3, 2005

Forrester Research has a new online forecast today. The researcher reports that nearly half of all marketers plan to decrease spending in traditional advertising channels like magazines, direct mail, and newspapers, all to earmark those dollars for online ad spending this year.

Forrester says total U.S. online advertising and marketing spending will reach $14.7 billion in 2005, a 23 percent increase over 2004. And its new five-year forecast shows that online marketing and advertising will represent 8 percent of total advertising spending in 2010.

"Despite significant changes in consumer behavior, there is a large disparity between the amount of time consumers are spending online and the money marketers are spending trying to reach them online," says Charlene Li, Forrester Research principal analyst, in a statement. "When at-work Internet use is taken into consideration, online consumers spend more than one-third of their time online -- roughly the same amount of time they spend watching TV. Yet marketers spend only 4 percent of ad budgets online versus 25 percent on TV," Li reports.

While marketers surveyed believe that online advertising channels, such as search engine marketing, online display ads, and e-mail marketing will continue to become more effective relative to traditional channels, they cite barriers including a lack of online advertising standards and hands-on experience.

In addition, Forrester projects that search engine marketing will grow by 33 percent in 2005, reaching $11.6 billion by 2010. Display advertising, which includes traditional banners and sponsorships, will grow at the average rate of 11 percent over the next five years to $8 billion by 2010.

Sixty-four percent of respondents to Forrester's survey said they are interested in advertising on blogs, 57 percent through RSS, and 52 percent on mobile devices, including phones and personal digital assistants.

Other observations: Forrester finds that marketers have lost confidence in the effectiveness of traditional advertising channels. Seventy-eight percent of survey respondents said they think search engine marketing will be more effective, compared with 53 percent of respondents who said TV advertising would become less effective. The only non-digital advertising channel to reach the same level of confidence as online channels with marketers is product placement -- only 8 percent of respondents believe that product placement will become less effective over the next three years.

And finally, a word on MSNBC.com's flyouts - those annoying laundry lists of headlines on the left margin of the site that your mouse skitters over very quickly. Apparently, just a day after the Minute commented on the flyouts (we missed the "Peculiar News" section within the News tab), we were informed that MSNBC.com redesigned the page so that there are no flyouts. The flyouts were removed on Saturday and replaced with a more streamlined interface, just a day after our comments (it's good to know the Minute is just a half a step ahead of things...).

Actually, we're told that MSNBC.com conducted a survey and weighed a considerable amount of feedback on the issue. Many readers, like me, were annoyed by the flyout design, others weren't. In the end, MSNBC.com decided to go with the more streamlined, less laundry list-like interface. It looks good. This is just one sign of an MSNBC.com overhaul slated to debut in coming weeks.