Forrester: Interactive marketing will read $55 billion in 2014

Posted by Erina Lin on January 11, 2010 at 4:09 PM

Interactive marketing will reach about US$55 billion, or 21 percent of all marketing spend in 2014, according to Forrester's new study "U.S. Interactive Marketing Forecast, 2009 To 2014."

As marketing budgets are shuffled from traditional toward interactive media, such as search marketing, display advertising, e-mail marketing, social media and mobile marketing, the cannibalisation of traditional media will lead to "a decline in total advertising budgets, death to obsolete agencies, a publisher awakening, and a new identity for Yahoo!."

This year, search marketing still make up the most interactive spending, representing 59 percent of the overall interactive pie, according to the study. By 2014, spending on paid listings, which includes paid inclusion, and search engine optimisation (SEO) will increase at a compound annual growth rate (CAGR) of 15 percent to $32 billion.

Display ad spending, including contextual listing and online video, has experienced a drop this year as many marketers moved branding dollars to direct response media in this recession. However, it is still strong, and will grow at a CAGR of 17 percent to nearly $17 billion by 2014, Forrester reported.

E-mail marketing, in addition, is expected to retain a healthy growth - with 97 percent of marketers using or planning to use it this year. Although having the lowest growth rate among all the interactive categories, it is still anticipated to see an 11 percent CAGR by 2014.

Social media is the fastest grower, with a 34 percent CAGR over the next five years. Forrester forecasted the spending on integrated campaigns through social networks and agency fees for creating social media assets will reach $3 billion by 2014.

The research also stated mobile ad spending will have a post-recession escalation until mid-2010 after more established tools are out. However, it will grow at a 27 percent CAGR over the next five years.

Forrester conducted the quantitative survey with 16 companies, including 24/7 Real Media, Altimeter Group, Burst Media, Carat International, Microsoft, MySpace.com, Sportgenic, TNS Cymfony, and Yahoo!, according to the researching firm.