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Posted by Shar VanBoskirk on August 24, 2011
By 2016, advertisers will spend $77 billion on interactive marketing – as much as they do on television today. Search marketing, display advertising, mobile marketing, email marketing, and social media will grow to 26%
35% of all advertising spend within the next five years.**
What does this growth mean for you?
1) Interactive media has gained legitimacy in the marketing mix. In past forecasts, we found that interactive budgets grew because of marketing experiments, or firms looking for lower-cost alternatives to traditional media. No more. The next five years of growth comes from bigger interactive teams spending sizably to bake emerging media into their strategies for creating rich customer relationships.
2) Search’s share will shrink. Search marketing (paid search and SEO) will continue to own the largest portion of the interactive marketing pie. But its overall share will decline as marketers shift search spend into biddable display investments, mobile marketing, and even social media.
3) Display media will rally. Bolstered by advances in audience targeting and bid-based buying approaches, advertisers will renew their love affair with display media. We expect display investments to grow as marketers apply display instead of search. And niche or remnant inventory sells for higher prices due to demand-driven pricing.
4) Mobile spend will surpass email and social media – this year. Mobile has the steepest growth curve in our study; spend in mobile ads and search will pass that in email marketing or social media this year. Email actually paces at a healthy 10% compound annual growth rate over the next 10 years. But the rapid adoption of tablets and their associated new and pricey ad formats will bolster mobile marketing investment.
5) Social media marketing will grows moderately. Our social media forecast includes money spent a) integrated social media campaigns – think advertising efforts that could not exist without social networks, like Facebook gifts, or sponsored conversations; b) with agencies to develop social assets; or c) to buy social media management technologies like a listening platform. But none of these investments are actually very expensive. So even though marketer curiosity about social media remains high, social media marketing spend is comparatively conservative.
How does this growth resonate with your own budget plans. I’m sure you’ll want to review the full report for the data and detail behind each of the above headlines. And you can manipulate our detailed models through ForecastView.
I’m also working with some colleagues to develop a benchmarking tool to help you benchmark your budget, interactive team size, and agency relationships against other firms. Stay tuned for further research on this, and for our benchmarking widget, which we expect to have live on our site before the end of October.
**Because of a miscalculation, I misstated the percentage of all advertising spend that interactive marketing represents. While the magnitude is not insignificant (35% to 26%), the error does not change our overall five year forecast ($76.6 billion) or the implications for interactive marketing professionals.