US Interactive Marketing Spending To Reach $61 Billion By 2012

Interactive marketing spending in the US will more than triple over the next five years, reaching $61 billion by 2012, according to a new Forrester Research, Inc. report. Forrester expects that a maturing perspective about interactive channels coupled with technology advances will eventually lead to interactive technologies infusing all marketing efforts, and the interactive marketing organization will dissolve.

The growth in interactive marketing spending represents a 27 percent compound annual growth rate (CAGR) over the next five years. Interactive marketing — which currently comprises 8 percent of all ad spending — will grow to 18 percent of total ad budgets in five years.

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 — not volume — 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 as marketers understand how to use and measure this channel.

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.

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