Retail, financial sectors to spend most on interactive through 2014: Forrester

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Interactive marketing will grow at a 16% compound annual growth rate over the next five years. However, the retail and financial services sectors will continue to have the largest share of overall interactive marketing spend at a combined 32%, according to a Forrester Research report released this week.

Brand advertisers in industries like consumer goods and automotive have the greatest potential for growth, according to the study. Forrester, in its US Interactive Marketing Forecast by Industry, 2009 to 2014 report, predicted that while consumer goods' interactive spend over the next five years will grow at a 22% average year-over-year growth rate, automotive and media and entertainment will grow by 19% and health and pharmaceuticals will grow 18%.

“I think for 10 years, everybody tried to make display media a direct response tool, and they got so disappointed if they didn't get high click-through rates,” said Shar VanBoskirk, VP and principal analyst at Forrester Research, and author of the report. “The reality is that display ads are great for branding, and we are seeing an evolution in measuring the engagement effects of display ads. Display has benefits beyond just direct sales.”

The study also found that educational and government services will grow their online marketing spend by 20% over the next five years.

“Government mandates are beginning to shift online for a cost-saving perspective,” said VanBoskirk.

She added that while the economy is certainly helping to move advertising spending dollars online, measurability is also playing a large role.

“Online is getting an uptick because it is less expensive than traditional and more measurable,” she said. “And this is not all because of the recession. More and more marketers are trying to have a conversation with their customers, and digital media makes facilitating an interactive conversation with customers easier.”

Last month, the Interactive Advertising Bureau and PricewaterhouseCoopers reported that US Internet advertising revenue was $10.9 billion for the first half of 2009, a 5.3% decline from the same period of 2008.

Forrester predicted in July that interactive marketing will hit $55 billion and represent 21% of all marketing spending by 2014, as marketers continue to shift dollars away from traditional media.

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