US interactive revenues set to grow

24 March 2009

NEW YORK: Alternative and interactive media such as the internet and branded entertainment will take a 27% share of US adspend by 2012, just 5% behind more traditional forms of advertising such as TV and print ads, reports the IBM Institute for Business Value.

Online is forecast to be one of the few mediums to enjoy meaningful growth in the US this year, with ad revenues expected to post a double-digit uplift after a registering an expansion of 13% in 2008.

IBM also predicts that alternative and interactive channels will have increased their share of the American ad market by 20% between 2002 and 2012.

Traditional advertising's overall share will have fallen by 15% over the same period to a total of 32%, while "traditional marketing", such as direct mail and promotions, will see its share fall from 46% to 42%.

Based on a global survey of chief marketing officers, IBM also found that 63% of firms plan to spend more on interactive and online marketing this year, while 65% will cut back on traditional advertising.

A further study among 2,800 consumers in the UK, US, Germany, India, Australia and Japan also found that the number of people using social networking sites rose from 33% in 2007 to 60% in 2008.

Mobile internet usage also almost trebled to 41% over the same period, with 35% of respondents accessing mobile music and video services, up almost four times on 2007 levels.

By contrast, 80% of advertising executives believe it will be a minimum of five years before the industry establishes true "cross-platform" marketing campaigns from sales to measurement.

Figures from the Winterberry Group also show that direct mail spending in the US last year fell from $58.4 billion (€43.1bn; £40.2bn) in 2007 to $56.7bn for the whole of last year.

Mintel Comperemedia found that credit card companies DM output fell by 21.8%, with mortgage providers also down 38.8% for the year as a whole.

Data sourced from AdWeek/New York Times; additional content by WARC staff