Insights from Forrester’s Interactive Marketing Forecast for 2009 to 2014

Excerpt from my Omniture Email

I received an email from Omniture today with a link to the 22-page July 2009 Forrester report by Shar VanBoskirk (et.al.) titled “US Interactive Marketing Forecast, 2009 to 2014”.  Since I am always intrigued by what the experts are forecasting (especially when it’s free), I clicked the link to get access to the report.   The basis for the report was a quantitative survey with 204 marketers and interviews with 16 vendor and user companies.

Since I couldn’t paraphrase the report’s summary any better than Forrester, here is their Executive Summary:

US Interactive Marketing Forecast, 2009 to 2014

Other highlights of the study include:

• Social media – Social media spending will see a 34% CAGR growth from $700 millinoto over $3 billion – the highest of any channel over the next 5 years
• Search marketing – Search marketing (58% of total interactive spend) and display advertising (31% of total) still represent the lion’s share of total spend of $55 billion in 2014
• Display ads – Advertisers continue to favor per-per-click (PPC) over impression-based ads – and 58% of display budgets are going to performance-based media mostly because of the easy measurement and immediacy
• Email – Email continues to grow at the expense of direct mail (the ‘green’ marketing alternative) and as it becomes more inexpensive and smarter
• Strategy – More than 40% of respondents say that marketing is become a strategic leader in their organization

I included the following chart because it addressed how marketers view the effectiveness of interactive vs. traditional marketing.

• 75% of respondents will increase budget for interactive by shifting money away from traditional marketing (60%) or by keeping traditional marketing budgets flat (15%)
• The big decreases in traditional marketing budgets will come from direct mail (40%), newspapers (35%) and magazines (28%)

Effectiveness of Interactive Marketing Tactics vs. Traditional Marketing Tactics

What’s interesting to me is that around 90% of the marketers believe that the effectiveness of “created social media” will increase over the next 3 years, compared to about 80% for online video and 75% for search engine optimization (SEO).  On the other hand, each of the traditional marketing tactics were forecast t o decrease by more than 50% of the respondents over the next next 3 years.  There’s no surprise in either interactive or traditional tactics and the disparity is easy to see if you focus on the medium dark blue bars above.   Marketers say that traditional methods are ineffective, but it still seems that they are spending large amounts of their budgets on this channel.

The report closes with some ways interactive trends will redefine the business of marketing:

• Advertising budgets will decline in the next 5 years, but marketing investments will not
• Traditional agencies that cannot nuture customer relationships will not make it
• As media becomes more syndicated, media will be digested across devices instead of just sites – which gives an advantage to Microsoft, Apple and Google

You can purchase the full report report from Forrester or get it from Omniture as I did, however I did not see a link on the Omniture website for the report yet.  It’s definitely a great read if you can get your hands on a copy.