Forrester's Five Year Interactive Marketing Forecast

Being a member of the American Marketing Association I get invited to all of the many webinars that they put on with various sponsors. Webinars don't normally hold my interest and instead I find myself reading or sending email or looking online at something else. However last week I signed up for one that actually kept my interest so I thought I'd share it with you here.

The title of the webinar was "The US Five Year Interactive Marketing Forecast" which was presented by Shar VanBoskirk, Principal Analyst for Forrester Research and sponsored by IMPAQT, a search-engine marketing firm.

The forecast predicts that interactive marketing will reach $61 billion by 2012. What's really significant about that number is that it will become 18% of all marketing spend which right now it is only at 8%. So by that time we should see interactive as a part of an everyday marketing campaign budget and integrated much more with traditional media. For example this year we saw many more Super Bowl advertisers using URL addresses in their ads (64% I wrote about in this post) and integrating the ads with websites. So by 2012 that percentage should reach 100%.

The biggest trend is that consumer behavior is changing and technology is adjusting consumer media time. Emerging media is commonplace for the younger consumers. These 18-27 years are spending more time online then they are watching television and almost as much time on their cell phones. This is all not surprising, however, the thing to note is that they, Generation Y, are the mainstream consumers of tomorrow. Interactive will become more effective than some traditional channels. The lesser media channels of today will most likely have double penetration a year from now and we'll see new media activities that aren't even here today. So the real question is, what will consumers be doing tomorrow and will marketers be willing to invest in these new media activities.

Interactive Marketing was broken down into the following categories:

• Search Marketing is expected to triple in 5 years to over $25 billion.
• Online Display ads will reach almost $14 billion. The ability to create reach media ads will help this growth.
• Email marketing spend will shift to integration which means that email will start to be more integrated with other mediums.
• Online video has the steepest growth curve of any of these channels because it has a very low adaption of around $450 million today. It's an easy medium for marketers to understand and something that they're familiar with. Interactive videos will also help see this medium grow.
• Emerging Media which Forrester defined as social media, mobile marketing and in-game advertising and states that social media is poised to have the most significant growth of these three elements. Social media is providing many marketers with a way to help get them interactive.

Next Shar gave her most controversial statement in saying that she doesn't think mobile marketing is an immediate priority. All the other tools outlined in this presentation should have priority over mobile. She believes, and I have to agree with her, that we still have a couple of years for mobile players to work out the mechanics of how to make it work in a cost effective way. By 2009 it should then be a viable marketing priority.

So, what should marketers prioritize?

Top of the list are the mainstays that most marketers are using today...email, search marketing and online ads and absolutely search marketing which is the #1 way consumers find websites: 72% of adults are coming to websites via search results and 57% of youths - they use social media more than adults.

Social Media tools are the up-and-comers...social networks, blogs, consumer-generated content, online video, RSS, podcasts, are all tools that marketers should start to integrate into their marketing mix.

Interesting media that nobody is really investing in yet is mobile, in-game ads and virtual worlds.

Shar summarized the presentation by saying "The world of interactive marketing is just beginning to unfold in terms of the kinds opportunities it can provide to marketers and their customers. This opportunity is still not completely unfamiliar though...the consumer is still the same type of consumer, but the tools are different." Here are a few of her recommendations:

• Focus on the mainstays: email, search and online ads
• Experiment with social media and online video
• Think about mobile in the next 18 months
• Grow your keyword list
• Beef up your search analytics
• Refocus on SEO

Sounds all like good, sound advice to follow.

Comments

[Debbie Hemley]

Thank you for providing a great summary of the webinar. One of the areas that often gets overlooked is Search Marketing.

The forecast that Seach Marketing is expected to triple in 5 years to over $25 billion is impressive to say the least, and begs to not be ignored. While I think it's important to stay on top of what's new and emerging, search marketing sometimes is like the elephant in the room.

The statistic you cite re: 72% of adults are coming to websites via search results-- is something that marketers need to get a better handle on.

Of course, there are many good resources on the web. While books can sometimes become outdated pretty quickly these days, there's still a lot of valuable information to get from these two books that I've recently come across:
1) Web Dragons: Inside the Myths of Search Engine Technology by Witten, Gori, and Numerico
2) Search Engine Marketing, Inc. by Moran and Hunt.

Again, thanks for your great summary.

[Donna DeClemente]

Your welcome Debbie and thanks for the book recommendations. The webinar did go into some more specifics on search engine marketing that I didn't mention in my summary. One of the things they pointed out is that even though the cost per keyword in paid search has been going up, the cost per lead still is the most effective when compared to other channels. So, yes it cannot be ignored.

[Shortcuts to Millions]

Social Media is bringing innovative trends to businesses allowing significant growth of different methods , hence they help provide many marketers with a way to help them get interactive.