November 12, 2009, 12:00 AM

Online remains advertising’s bright spot, analysts say

Retail and wholesale interactive marketing budgets will balloon from $4.7 billion this year to $8.6 billion by 2014, according to a new Forrester report. The reason is the interactive marketing is particularly good at driving conversions.

 

Retail and wholesale interactive marketing budgets will grow from $4.7 billion this year to $8.6 billion by 2014, according to “U.S. Interactive Marketing Forecast by Industry, 2009-2014,” a new report from Forrester Research Inc. Interactive marketing budgets include online search and display ads, e-mail and mobile marketing efforts, as well as social media campaigns.

The reason for the strong growth curve, the report suggests, is that interactive tools are particularly good at driving consumers to make online purchases immediately.

While Forrester sees growth ahead, online marketing has not been immune to the economic downturn. Worldwide spending on Internet advertising contracted for the third quarter in a row, to $14.6 billion from $14.7 billion a year ago, according to “Worldwide and U.S. Internet Ad Spend Report 3Q09,” a report issued by research and advisory firm IDC. U.S. spending declined nearly 4% year over year, to $6.39 billion from $6.64 billion, according to the report.

Dovetailing with Forrester’s predictions, IDC says that even though this year’s growth rates remain in the red, online advertising has begun to turn around. While IDC expects fourth quarter U.S. online ad spending to decline slightly year over year, it anticipates growth by the first or second quarter of 2010. “Search ads will recover first, followed by display ads and classifieds,” according to the report.

 

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