CAMBRIDGE, Massachusetts: Consumer packaged goods brands will be among the main drivers of growth in interactive advertising expenditure in the US over the next five years, according to a new forecast from Forrester, the research firm.
The company has previously predicted that interactive marketing spending – which includes search, display, social media, email and mobile – will rise by 16% each year from 2009 to 2014, to a value of $55 billion (€36.8bn; £33.2bn).
At present, the research firm estimates that retail and financial services deliver 33% of all revenues through this channel, a share that will decline slightly, to 32%, in five years time.
Digital platforms are said to be especially attractive for these organisations, not least because they facilitate rapid transactions. Some finance brands have also heightened their activity on both traditional and new media during the recession, as they seek to communicate reassuring messages to consumers.
By contrast, marketers in the FMCG, entertainment, automotive and healthcare segments are seen as lagging behind somewhat, but Forrester believes this situation will change going forward.
During the next five years, consumer goods companies – typically among the biggest spenders offline – will record a compound annual growth rate in interactive outlay of 22%, to $3.1bn overall.
This expansion will reach 19% per annum for media and entertainment, and 18% for health and pharma, taking these industries to $2.4bn and $3.0bn, respectively, at the end of the forecast period.
Automotive will also provide some $3.9bn in adspend to these emerging mediums by this date, as figures swell by 19% on an annual basis.
Similarly, telecoms will post a CAGR of 15%, to $1.8bn, during the timeframe under assessment, with education, local services and government up by an even more substantial 23%, to $6.6bn, in the next half decade.
Business-to-business, which includes consultancies and agencies, will come to account for around 9% of market share, as its totals rise from $2.3bn to $4.8bn from 2009 to 2014.
Firms in the travel sector currently have the highest interactive budgets per company, with category spending set to move from $2.3bn to $5.0bn.
Forrester said these brands "have the longest tenure with online channels, a history using customer insights to target messages in the offline world, and the ability to see immediate online sales generated from interactive efforts."
With regard to particular advertising formats, online video is expected gain considerable traction as the options it provides continue to evolve, and as the rules regulating how pharma brands can use such executions gain a greater degree of clarity.
Procter & Gamble has already undertaken trials for Prilosec OTC in this field, as has AstraZeneca for Nexium, and Sanofi Aventis for Ambien CR.
Display advertising should not be dismissed by brands looking to connect with consumers, Forrester continued, despite the fact revenues in this area have been under pressure for some time.
Shar VanBoskirk, principal analyst at Forrester, said "I think for ten years, everybody tried to make display media a direct response tool, and they got so disappointed if they didn't get high clickthrough rates."
"The reality is that display ads are great for branding, and we are seeing an evolution in measuring the engagement effects of display ads. Display has benefits beyond just direct sales."
Overall, VanBoskirk argued that establishing the correct interactive investment strategy will depend on taking a nuanced approach.
"While it's helpful to understand industry spending dynamics, we recommend benchmarking your own spend against companies that are like yours – even if they are outside of your industry group," she said.
Data sourced from MediaPost; additional content by Warc staff