Web Ad Spend to Diversify

NEW YORK After years of interactive advertising being dominated by search and display advertising and e-mail programs, new outlets and more sophisticated marketers portend more diverse spending in years to come, according to a new study.

Forrester Research, like nearly all ad-spending forecasts, projects marketers will shift budgets online at a quick pace in the next five years. By 2012, it expects the market will hit $61.3 billion, up from $18.4 billion in 2007. In five years, Forrester expects interactive spending to account for 18 percent of marketing budgets.

The maturing of new channels like mobile, video games, social media and online video will help not just grow but reorient the balance of the market. Display advertising will see its share of online advertising fall from 33 percent to 22 percent, according to the forecast. E-mail marketing’s slice of spending is expected to fall from 15 percent to 7 percent.

Forrester sees much higher spending growth in newer areas. It expects buying in the “emerging channels” category (in-game advertising, social networks, mobile) to grow from $1 billion to $10.6 billion in 2012, when it will make up 17 percent of all spending. Online video is set to grow from $471 million in 2007 to $7.2 billion in 2012, accounting for 12 percent of online marketing spending.

An area that is expected to continue to have outsized influence: search marketing. Its share of the market is projected by Forrester to decline slightly, from 44 percent to 41 percent. Yet its compound growth rate of 26 percent is to keep pace with the overall market.

Shar VanBoskirk said the shifts are a result of marketers taking a more “holistic” view of their online marketing and the continued amount of attention consumers are paying to new channels like social networks.

“Advertisers are getting smarter about distributing their budgets across channels, instead of the next big thing,” she said. “The marketer was putting a lot of money into just one channel.”

Forrester sees online video on its way to becoming a mainstream user activity. In a consumer poll, it found 19 percent of adults watch video content monthly, a figure it expects to quickly rise as more content becomes available. While most video advertising is in the form of pre-roll clips, marketers will increasingly turn to alternatives like video overlays used by VideoEgg and Google, Forrester predicts.

Forrester surveyed 344 marketers of varying sizes in July.