Forrester’s Views On Interactive Marketing

Gail Chiasson, North American Editor

By 2016, advertisers in the U.S. will spend $77 billion on interactive marketing — as much as they do on television today, according to Forrester’s US Interactive Marketing Forecast, 2011 To 2016

Forrester Research Inc.’s forecast (compiled back in Aug./11) makes for a good read, and while is deals little with digital-out-of-home or out-of-home, it does deal a lot with mobile, social and the other media sectors that today are integrating with DOOH in an increasingly major way. We’ve picked out various points from within the study that are likely to most interest our readers:

  • Search marketing, display advertising, mobile marketing, email marketing, and social media will grow to 35% of all advertising spend as they are embedded in the marketing mix. The forecast says that this this growth is expected to help firms become adaptive, kill off daily deals, re-emphasize marketing’s ‘p’s’, and turn consumer electronics into audience-targeting tools.,When interactive marketing reaches 35% of all advertising, it will be the second-largest line item in the marketing budget.
  • Firms looking to differentiate in this age of the customer will invest to create customized experiences across their customers’ preferred touchpoints. This will augment existing online media efforts and inspire development for new platforms such as smartphones and tablets. Forrester projects that by 2015 smartphone adoption will grow 150%, and 82 million consumers will own a tablet.
  • Buyers will embrace mobile commerce and the advertising that drives it. Advertisers enamored by the mobile commerce outlook – that mobile commerce will top $31 billion in five years – will buy ads to promote more mobile transactions. More mobile commerce will inturn further mobile ad investment. eg. Intercontinental Hotels is ramping up its location-based marketing since its room bookings from mobile devices increased 1,000% in the first five months of 2011. And the explosion of tablet adoption will amplify this cycle: 47% of tablet owners have already shopped and bought on their devices.
  • Nearly all enterprise marketers use email marketing as the workhorse of their interactive mix. But spend on email marketing delivery, analytics, integration, and creative nears just $2.5 billion by 2016 because of its very low CPMs. However developing mobile or social programs will make you send more emails, because email tethers together customer experiences across channels. eg Glamour puts blog content in its weekly e-newsletter. And in-store associates at Pacific Sunwear of California use tablets to sign consumers up for its daily deal emails. British Airways created an email campaign to drive downloads of its new Executive Club app. generated 8,500 new leads for 50 cents each by emailing existing subscribers with a referral offer that they could forward via email, Facebook, or Twitter. So the more channels marketers embrace, the more email programs they’ll need to support them. And further email delivery growth will come as marketers spend to get more specific about what they send to whom, when to whom, when.
  • The combination of social media management technologies, agency fees, and spend on paid integrated social network campaigns is expected to rev social media at a 26% compound annual growth rate over the next five years. But social media will only tip $4.4 billion and account for just 7% of interactive spend by 2016. As with email marketing, social media costs are low enough to dampen overall investment, even with widespread adoption.
  • Listening will develop into social intelligence. Growth will come as more organizations buy listening platforms like Trackur or Crimson Hexagon to monitor social conversations. But Forrester expects the bigger investment to come from firms integrating social data into their existing customer database as part of CRM upgrades – a spend not typically made by the interactive marketer.
  • Even with its 17% compound annual growth rate, Forrester doesn’t expect that interactive marketing will supplant established marketing best practices.
  • Daily deals will die. Standing out above the clutter becomes harder for marketers as ad exposures grow. Some marketers, unable to differentiate, will rely on spontaneous coupons through more and more urgent Groupon-like ‘daily deals’ as one way to drive notice. Consumers will grow so conditioned to micro-impulse offers that they’ll lose practice at considered decisions – in all walks of life, not just when buying spa treatments. Employers (and spouses) will blacklist impulse deals to keep people intentional.
  • Ad-supported devices will enhance audience targeting. More interactive marketing investment will spawn more ad-supported content. In time this will open the door for ad-supported hardware too: big online user networks like Google and Facebook will option ‘freemium’ devices to consumers in exchange for embedding ads into their displays. This will lead to a spate of online publisher-consumer electronics partnerships. But the real advertiser boon will be enhanced user targeting. Sponsored devices will leverage mobile advances like gyroscopes, 3D cameras, and biometrics to detail room location, environmental surroundings, even current companionship back to Google to aid ad
  • But non-sponsored versions will still exist – for a fee!

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