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The latest forecast from Forrester Research predicts that interactive marketing in the US will hit nearly $55 billion by 2014 and will grow – at a compound annual growth rate of 17% – from 12% of overall ad spend in 2009 to 21% over the next five years.


According to Forrester‘s? Five-Year Interactive Marketing Forecast Report, search marketing – which now composes more than half of 2009’s overall interactive spend, will continue to make up the biggest portion of interactive dollars, rising from $5.4 B in 2009 to $31.6B in 2014 at a compound annual growth rate of 15%.

Social media marketing and mobile marketing will experience the highest growth rates among the digital tactics, the report stated. Social media, which represents only $716M today, is expected to balloon to $3.1B by 2014, and grow at the highest compound annual? rate, 34%. Forrester? noted that owned social media assets (such as internal blogs, community sites) are currently the only emerging media getting traction in today’s economic climate.

Similarly, mobile marketing, which accounts for $391M in 2009, will grow to $1.3B in 2014 at a compound annual growth rate of 27%.

Email marketing, which expected to grow at a compound annual rate of 11%, will experience the least growth proportionately, though the amount of spending on it will still rise from $1.2B to 2.1B in five years.

Ad Budgets to Shrink

Forrester also believes that advertising budgets overall will decline over the next five years as dollars migrate from more-expensive forms of traditional media to less expensive, more efficient and more measurable interactive tools.

Despite this shift, Forrester VP and analyst Shar VanBoskirk believes that many marketers will find ways to hold onto their hard-won budgets.

Rather than relinquishing their marketing dollars, smart marketers will “allocate unused advertising dollars into investments like innovation, research, customer service, customer experiences, and marketing-specific technology and IT staff, in order to further marketing’s strategic influence within their companies,” she said.

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