Commentary

All Channels Lead To The Consumer

All Channels Lead To The Consumer

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According to a new Forrester Research report released at the Forrester Consumer Forum 2007 in Chicago, interactive marketing spending in the US will more than triple over the next five years, reaching $61 billion by 2012. The growth in interactive marketing spending represents a 27 percent compound annual growth rate over the next five years, and interactive marketing, 8 percent of all ad spending, will grow to 18 percent of total ad budgets in five years.

Forrester Research Principal Analyst Shar VanBoskirk, said "As firms continue to make customer centricity a higher priority, they will recognize that maintaining separate marketing teams to manage different sets of channels that all target the same customers makes no sense," ... (as) interactive technologies gradually infiltrate... such traditional paragons as television, billboards, and direct mail... the concept of a separate interactive marketing organization will disappear."

Based in part on a survey of 344 interactive marketing professionals and their budget decisions affecting display ads, search, email marketing, online video, and emerging media (social, mobile, and advergaming). Forrester's breakdown of spending includes the following:

  • Search marketing will triple in five years. Mainstream marketers' aggressive use of search marketing will grow the category at a CAGR of 26 percent to $25 billion by 2012 due to the increasing costs of paid search, additional spending on optimization tools and services, and international expansion
  • Display advertising will reach $14 billion by 2012. Display ads will be a key factor in the interactive marketing budget by having an essential supporting role for all interactive campaigns
  • Services and integration will drive email marketing growth. Spending will focus on improving email relevancy with analytics and data management, and will grow to more than $4 billion by 2012
  • Online video ads will significantly increase. Growing consumer adoption of online video will result in a dramatic 72 percent increase in online video ad spending to $7.1 billion by 2012. More customer-centric online video applications will increase the medium's appeal for consumers and marketers
  • Social media will drive emerging channels to $10 billion by 2012. Mainstream adoption will boost spending in emerging channels such as social media, mobile, game marketing, widgets, podcasts, and RSS. Spending on social media alone will grow to $6.9 billion.
  • Mobile marketing will grow to $2.8 billion. As consumers become increasingly tied to personal computing handsets, they'll want to extend their mobile utility to accommodate transactions. This transition will drive mobile marketing to grow to $2.8 billion by 2012.

VanBoskirk adds "These changes will... give interactive marketing professionals a more legitimate seat at the marketing table... with interactive marketing gaining executive visibility.. for its popularity with young consumers (as well as) measurability and cost effectiveness... "

For the complete release, visit here, or the US Interactive Marketing Forecast, 2007 To 2012 is available from Forrester here.

 

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