Where Interactive Marketing Dollars Are Going

by Jason Falls |
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Forrester Research has released a new report forecasting interactive marketing spend in the U.S. for the next five years. The report, authored by Shar VanBoskirk, is available in its entirety on the Forrester Research website.

The report details how certain industries currently spend, and projects how they will spend, on interactive marketing. It also offers some interesting insights for businesses trying to ensure they are either catching, or keeping up with the Joneses. VanBoskirk talks more about it on the Forrester Research blog for Interactive Marketing Professionals.

Current Interactive Marketing Spend - Courtesy of Forrester Research, Inc. (Click for larger version)
Current Interactive Marketing Spend - Courtesy of Forrester Research, Inc. (Click for larger version)

The chart above shows what Forrester estimates brands are currently spending on Interactive Marketing. Display advertising is banner ads and similar, standard ads on websites. The numbers aren’t all that surprising, but think about where the industry is when you think of these insights:

  • Display ads continue to dominate consumer goods and media and entertainment, among other categories. This despite the fact consumer trends indicate ads simply don’t work as well as other interactive areas.
  • The industries that have been using the web the longest – travel and hospitality – spend three times as much on search marketing as display ads and almost 30 percent of their overall budget on Interactive. That’s 10 percent more than any other industry.
  • Social media spend is last or second to last in all categories except business services. Social media consultants and agencies selling social media fall into that category.
  • Email marketing, the interactive version of cash cow direct marketing, appears to be almost an afterthought across the board.

It doesn’t surprise me that media and entertainment and consumer goods industries continue to buy display ads more than other Interactive media. They’re not only conditioned to buy ads to communicate their message and under the influence of media planning and buying firms who only make money when they buy them, but they’re the final bastion of people who don’t understand consumers have flocked to arenas like social media to get away from the bull horns of traditional marketing. Are they getting better? Probably. Do they have a way to go? Yep.

Travel and hospitality industries have a few years experience on these others and are spending a ton more on search marketing and a ton more total dollars. I’ll give you a hint, GPG folks … they’re onto something.

While the cost of social media essentially equates to labor costs, there should still be more dollars devoted to it across the board. I say this not because I want to make more money (though I won’t turn it away) but because social media — building relationships with your consumers — is the one interactive marketing method that is sustainable and cost efficient in being such. You’re investing in the lifetime of your consumers here. The dollars will go a lot farther.

And if you aren’t taking advantage of good email marketing, you need to stop what you’re doing and figure that piece out fast. Email marketing done right, delivered to the right audience and with the right message is still the best way to consistently reach people in the interactive space.

These are my ideas on how companies and industries should look to change some of these numbers. You’ll have to go purchase the Forrester Report to see if their predictions match up with what I’m recommending. (Warning: Forrester Reports aren’t cheap, but do come with a three-week, money-back guarantee.)

In the meantime, what do the numbers tell you? What surprises you? What seems odd? A penny for your comments …


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About the Author

Jason Falls

Jason Falls is a leading thinker, speaker and strategist in the world of digital marketing and is co-author of two books, No Bullshit Social Media: The All-Business, No-Hype Guide To Social Media Marketing and The Rebel's Guide To Email Marketing. By day, he leads digital strategy for Elasticity, one of the world's most innovative digital marketing and public relations firms. Follow him on Twitter (@JasonFalls).