Value of sector will triple over next five years

Interactive marketing spending in the US will more than triple over the next five years to $61bn, internet analysts predict.

Forrester Research said that a maturing perspective about interactive channels, coupled with technology advances, will lead to interactive technologies " infusing" all marketing efforts.

"As firms continue to make 'customer centricity' a higher priority, they will recognise that it makes no sense to maintain separate marketing teams to manage different sets of channels that all target the same customers," said Forrester principal analyst Shar VanBoskirk.

"Over the next five years, we see interactive technologies gradually infiltrating all media, including traditional paragons such as television, billboards and direct mail, and the concept of a separate interactive marketing organisation will disappear."

The analyst firm predicts that interactive marketing spending will enjoy a 27 per cent compound annual growth rate over the next five years.

Interactive marketing, which currently comprises eight per cent of all ad spending, is expected to grow to 18 per cent of total ad budgets in five years.

The forecast is based in part on a survey of 344 interactive marketing professionals and their budget decisions affecting display ads, search, email marketing, online video and emerging media, which includes social, mobile and 'advergaming'.

Forrester predicts that mainstream marketers' aggressive use of search marketing will grow the category to $25bn by 2012 owing to the increasing costs of paid search, additional spending on optimisation tools and services, and international expansion.

Display advertising is expected to reach $14bn during the same time period, according to Forrester, to become a key factor in the interactive marketing budget by having an essential supporting role for all interactive campaigns.

The analyst firm also forecasts that online video ads will significantly increase. Growing consumer adoption of online video is expected to result in a "dramatic" 72 per cent increase in online video ad spending to $7.1bn by 2012.

"These changes will not only affect the budget structure of marketing organisations, but will give interactive marketing professionals a more legitimate seat at the marketing table," VanBoskirk added.

"Interactive marketing is gaining executive visibility as much for its popularity with young consumers as for its measurability and cost effectiveness.

"We see a class of marketers emerging who will involve themselves with a few high-profile interactive experiments in order to catapult themselves into the chief marketing officer's seat."