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Forrester: Online ad spend to hit $61 billion by 2012

October 29, 2007

Get ready for a surge in online advertising. That according to a recent Forrester Research report, which projects that online advertising dollars will reach $61 billion by 2012, a compound annual increase of 27% over the next five years.

"As firms continue to make customer centricity a higher priority, they will recognize that maintaining separate marketing teams to manage different sets of channels that all target the same customers makes no sense," said Forrester Research Principal Analyst Shar VanBoskirk. VanBoskirk went on to say that companies will begin coordinating all ad campaigns through one marketing organization.

Those dollars won't come from just one channel. According to the report, as interactivity continues to increase, ad dollars will be spread over the entire interactive world rather than marketers focusing on one specific ad channel. That change will likely lead to more focused efforts from a more focused marketing team.

Search marketing is forecast to continue leading interactive marketing efforts, reaching $25 billion by 2012 (a 26% CAGR increase). Next will be display advertising which is expected to reach $14 billion. Following display ads is email marketing, which is likely to reach $4 billion by 2012.

After the big three advertising efforts will be online video ads. Video is expected to reach $7.1 billion, an increase of more than 70%. Social marketing efforts will continue to garner a nice chunk of advertising budgets and is expected to reach $10 billion by 2012 thanks to widgets, gaming and podcast applications. Finally, mobile marketing is expected to soar past $2.5 billion by 2012 as users continue to adopt online connectivity through their handsets.

Author:  Kristina Knight


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