July 17, 2009, 12:00 AM

Spending on interactive marketing will reach $55 billion by 2014

Spending on interactive marketing will approach $55 billion in 2014, representing 21% of all marketing expenditures, and cannibalizing traditional media, according to a new study from Forrester Research Inc.

Spending on interactive marketing will approach $55 billion in 2014, representing 21% of all marketing expenditures, and cannibalizing traditional media, according to a new study from Forrester Research Inc. Interactive marketing will reach $25.6 billion this year, accounting for 12% of ad spending, the firm predicts.

60% of 204 marketing executives surveyed by Forrester said they are increasing their budgets for interactive marketing-search marketing, e-mail marketing, social media and mobile marketing-by shifting money away from traditional media. Money for interactive marketing will be drawn from budgets for direct mail (40%), newspapers (35%), magazines (28%), television (12%), yellow pages (11%), outdoor (9%), radio (8%), and telemarketing (7%).

However, retailers are delaying adoption of some forms of emerging media because of financial restraints stemming from the recession, according to Forrester’s “U.S. Interactive Marketing Forecast, 2009 to 2014.” With the exception of creating social media assets, which 86% of marketers plan to do by year-end, spending on other emerging media, such as video and mobile, will be flat.

Spending on video and mobile marketing will begin to increase in mid-2010 or early 2011, as marketers emerge from the recession, Forrester says. Spending on mobile marketing is expected to reach $1.3 billion by 2014, up from $391 million this year, a compound annual growth rate of 27%. Social media will increase to $3.1 billion in 2014 from $716 million this year, a 34% CAGR.

Search marketing continues to lead in interactive marketing spend, accounting for 59% of the interactive pie. Nearly 80% of marketers use paid search and search engine optimization. Spending on search marketing is expected to increase to $31.6 billion by 2014, up from $15.4 billion this year, a 15% CAGR.

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