A Forrester Research, Inc. report released at the Forrester Consumer Forum in Chicago this past month provided survey results from a sample of 344 interactive marketing professionals who were asked about their budgeting decisions throughout various forms of interactive marketing.
Forrester extrapolated that over the next five years, spending on interactive marketing will grow at a 27% compound annual growth rate (CAGR) and its share of marketing budget will grow from 8% to 18% of total ad spending.
The majority of this projected growth will be distributed amongst search marketing (projected to grow to $25 billion) and display advertising (projected to reach $14 billion). Of special interest was Forrester’s prediction that spending on social media will grow to $6.9 billion over the next five years, which would surpass their projections for mobile marketing ($2.8 billion) and e-mail marketing ($4 billion). Another major area of growth will be in online video advertising, which Forrester projects could reach $7.1 billion by 2012.
Of course, predicting growth in online spending five-years in advance based on a survey of 350 online marketing professionals is probably not the most methodologically sound approach in the world. In other words, I wouldn’t mortgage the house to start investing in social media companies quite yet but at the same time I believe the survey results are a good indicator of the current perspective on the growing importance and potential of social media.
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