Studying the impact of innovation on business and society

The Future of Interactive Marketing


Source: Shutterstock

Forrester recently released a new report tracking the future of US interactive marketing through 2014. Authored by Shar VanBoskirk, with Christine Spivey Overby, Niki Scevak, and Angie Polanco, Forrester predicts that interactive marketing is poised to grow at a 16% compound annual growth rate (CAGR).

Even though interactive marketing will approach $55 billion by 2014, the report also observes that not all industries will keep pace with this growth. Retail and financial services are expected to dominate the greatest share of all interactive marketing. Brand advertisers in industries such as consumer goods however, represent the most notable potential for growth.

Nevertheless, Forrester cautions readers of this report to analyze competitive and industry activity before committing to spend and programming

But while it’s helpful to understand industry spending dynamics, we recommend benchmarking your own spend against companies that are like yours — even if they are outside of your industry group.

To provide guidance to decision makers across a diverse set of industries, Forrester studied search marketing, display advertising, email marketing, social media, and mobile marketing by 11 business verticals.

The overall theme is innovation and sophistication

Highlights from the research include:

1 – Retails and financial services spend the most in each of the verticals examined, accounting for 33% of all interactive spend.

2 – Big offline advertisers are expected to demonstrate the greatest volume of growth including, media and entertainment, consumer goods, automotive, and healthcare firms. It is expected that these industries will grow at a 22% CAGR over the next five years.

3 – B2B interactive investments will remain consistent, representing 9% of the overall interactive landscape. Business services, accounting firms, consultancies, and agencies as well as business trade elements, will grow from $2.3 billion to $4.8 billion in 2014.

4 – As is any research, there is usually a category for “other.” In this report Forrester assembles education, local services, and government in one sliver with online universities, home improvement services, and local and national government to increase spending by more than 20% between now and 2014. This growth is attributed to 1) local advertising options continue to improve; 2) government agencies promote newly online processes; and 3) the competition for online students will increase. In one such example, the University of Phoenix developed its own online ad network to distribute online promotions and coupons as a means for increasing course registrations.

In each of the 11 categories that Forrester explored, the average CAGR over the next five years was 16% with “other” representing the higher end of spending with 23% and lead generation on the other end of the spectrum with 9%. Other high growth industries for interactive marketing spending include:

Consumer Goods – 22%
Automotive – 19%
Media & Entertainment – 19%
Travel – 18%
Health and Pharmaceuticals – 18%
B2B – 15%
Telecommunications – 15%
Financial Services – 14%

One of the more interesting aspects of the Forrester report was the allocation of spend across multiple channels with Social Media ranking either fourth or fifth (out of 5) within the mix.  In 2009 interactive spend was mostly concentrated on search marketing – rightfully so as with online customers and prospects, almost everything begins with search.

Other top channels in 2009 for interactive marketing include:

Display Advertising
Email
Mobile (which I can only believe will increase dramatically of the next five years)

In a Forrester report published earlier this year, Social Media spend is expected to increase by 34% by 2014, placing it just behind mobile marketing, but ahead of search marketing. Regardless of industry, the top areas of marketing, whether it’s interactive or marketing in general, for any business, must focus on social, mobile, and also the real-time Web. Thus forming a Golden Triangle engagement.

This post represents only a handful of the insights shared in Forrester’s new report. Please visit Forrester online for the full analysis.

Connect with Brian Solis: Twitter, LinkedIn, Tumblr, Plaxo, or Facebook

Get the new iPhone app!

Click the image below to buy the book/poster:

37 COMMENTS ON THIS POST To “The Future of Interactive Marketing”

  1. Brilliant report, search marketing is of course the lead dog; however when you want to engage for a longer period of time, you have to give people something of value. Time is the new currency, they land you have to offer something. The more time spent with the brand, the more meaningful the connecion.
    3D web, immersive entertainment and virtual worlds are going to be incresingly important. AVATAR The Movie was the largest download in iTunes history, the Machinima channel is the most viewed channel on YouTube.
    Interactive entertainment is going to be very much in the mix for branded customer integration as it is highly targeted, high concept and very, very cost effective.
    Using Second Life as a media platform for all the right reasons.
    http://www.pookymedia.com/

  2. jonathanstreeter says:

    I have to admit I don't understand the following statement:
    “Big offline advertisers are expected to demonstrate the greatest volume of growth including, media and entertainment, consumer goods, automotive, and healthcare firms.”

    At the risk of looking ignorant, I'd like to know (1) what's an offline advertiser and (2) how could an offline organization demonstrate online growth?

  3. PeninsulaShops says:

    Whoo Hoo… Go team http://www.peninsulashops.com … as we are now entering the development stages of Location Based Services….

  4. Funny, I was just reading the 2009-2014 report this morning. I see a big disconnect between the perceived effectiveness of Display and it's projected spending growth.

  5. Wow, this is jam packed with lots of useful information. It's interesting that they predict social media spending is expected to increase by 34% by 2014. Thanks for the information!

  6. secretsushi says:

    Brian this is great information. Do you see mobile slightly behind social media (rather than ahead) in this data primarily because social media is what is driving much of the emphasis on mobile? Due to devices like the iPhone and the surge of other competitive smart phones we are perpetually connected. The upswing of application development for each of the major mobile platforms should be a sign that folks are increasingly more attracted to how connected and interactive their devices are as they are about the call quality. The continued rise of the mobile space should bring incredible opportunities for social media to tag along every step of the way.

    • briansolis says:

      I'm not sure. I'm frequently reminded of just how big the mobile web is in general, so some might argue that mobile is indeed ahead. I have another research paper to read that might clarify this a bit.

  7. suyogmody says:

    i'm interested to hear about what people think about forrester's relevance in this space – they've been on top of the game in terms of IT and enterprise technology needs but are they right up there with emarketer etc when it comes to interactive marketing?

  8. WatsonRodriguez says:

    Great article. I used a shopping portal for my analogy. Remember how worried you were putting your visa number in that box on shopping portal for the first time? The same is true for social media. It will take the majority some time to become comfortable with social media but I don't expect it to ever go away. Apply it in your business practices or be left behind.
    location villa bali

  9. WatsonRodriguez says:

    Great article. I used a shopping portal for my analogy. Remember how worried you were putting your visa number in that box on shopping portal for the first time? The same is true for social media. It will take the majority some time to become comfortable with social media but I don't expect it to ever go away. Apply it in your business practices or be left behind.
    location villa bali

Leave a Reply

Your email address will not be published. Required fields are marked *

Join the Newsletter

Sign up for the newsletter.

Stay Connected
Instagram
Twitter