NEW YORK: The exponential growth of online marketing is well-established. Until now the sector has been dominated by search and display ads, but a report by Forrester Research predicts that spending in the sector will become increasingly diverse.

The firm estimates online marketing in the US will reach $61.3 billion (€43.2bn; £30.2bn) by 2012, up from $18.4bn in 2007; while 18% of marketing dollars will be spent on interactive advertising.

The emergence of in-game ads, social networks and mobile media is expected to reduce display's share of online advertising from the current 33% to 22% over the next five years.

The newer channels are forecast to grow from $1 billion to $10.6bn in 2012, comprising 17% of online marketing spend. Online video is likely to grow from $471 million in 2007 to $7.2 billion in 2012, accounting for 12% of spend.

Email marketing is forecast to see its share drop from 15% to 7%, but search's decline is likely to be marginal, from the current 44% to 41%.

Comments Forrester principal analyst Shar VanBoskirk: "Advertisers are getting smarter about distributing their budgets across channels.

"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 organization will disappear."

Data sourced from Adweek (USA); additional content by WARC staff