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Interactive Marketing Is The Future

Written by Martin Wong on June 23, 2010

According to Forrester Research, interactive online marketing is predicted to grow to 21% of all marketing spending by 2014. This would mean the interactive online marketing industry would grow to almost $55 billion dollars per year by 2014. Forrester’s most recent US Interactive Marketing Forecast (2009-2014) predicts the further cannibalization of traditional media and the breakdown in the business models of traditional advertising, marketing and public relations agencies that can’t make the successful jump into interactive online channels.

The survey results were taken from 204 marketing executives at large firms with over 200 employees from a wide variety of industries. Interestingly, Forrester predicts that advertising budgets will continue to decline as less expensive and more targeted online marketing tools enable marketers to spend less money to accomplish their current advertising goals. Instead, the money saved can be better spent on innovation, research and development, customer service, user experience and new technology investments.

Interactive Online Marketing Trends 2010-2014

Some of the key findings in the report:

Interactive online marketing tools are more effective than traditional ones, particularly during a recession. Interactive online tools are less expensive, more measurable and offer better response and interaction with consumers than traditional media.

Consumers want an interactive brand experience and as a result customer relationships are becoming more interactive. Disruptive marketing practices like 30-second television commercials and print advertisements are becoming less effective as today’s consumers increasingly block out advertisements. However, 42% of online adults and 55% of online youth want to engage with their favorite brands through social applications like Facebook, Myspace and Twitter.

Interactive online marketing delivers results and marketing departments are shifting their spending away from traditional marketing sectors. When survey participants were asked which traditional marketing sectors they were moving their spending away from, the biggest decreases (in order) were in direct mail, newspapers, magazines, television, yellow pages, outdoor ads, radio and telemarketing.

The fastest-growing areas of online marketing industry are social media marketing, online video marketing, search engine optimization (SEO) and mobile marketing. Search engines, Google in particular, continue to dominate how people find and research new products and services online. With Facebook’s membership now numbering over 500 million users worldwide, having a presence on the social networking site is essential for major brands and smart companies who want to tap the power of social influencing.

Search engine marketing continues to dominate online marketing spending with 59% of total spending. It is expected to grow at a rate of 15% per year and reach $32 billion dollars by 2014. Currently, over 80% of marketers use some form of paid search marketing or search engine optimization. Search volume continues to increase at a high rate and many companies are shifting more of their paid advertising dollars into search engine optimization spending because it is often more cost effective to do so. In total, the bulk of search engine marketing spending goes into paid search advertising.

Measurement is improving for online brand advertising and new attribution models like Microsoft’s Engagement Framework are making it easier for marketers to assess the relative influence of branding events and display ads. While it is much easier to measure the Return on Investment (ROI) of PPC campaigns, these new attribution models are making calculating ROI easier for brand advertising and social media marketing campaigns.

Social media marketing is poised to explode with 34% yearly growth over the next 5 years. Many companies are now integrating their paid online advertising and search engine optimization strategies with a social marketing strategy to maximize the effectiveness of all online marketing activities. The biggest trend to watch in social media is the increasing personalization of content, search results and ads delivered to users based on their social profiles, locations and browsing activities.

The use of mobile computing platforms is also surging with 27% yearly growth expected for the next 5 years. Led by the new iPad, iPhone and Android Smartphones, the use of apps and searching on mobile platforms has doubled in the last year. Increasingly, people are using their mobile devices in a similar way to how they had previously used their home computers.

Interactive Marketing Means Building Relationships

As people continue to spend more time online and using their mobile smartphones, marketers will need to be more creative and develop new strategies that capture the attention of consumers. The future of marketing will involve less disruptive advertising and more use of well-designed content and information that provides value and helps solve problems for consumers.

Marketing has always been about building relationships. Now, interactive online tools allow us to build and cultivate relationships on a much larger scale. The marketers and the companies that will thrive in the online marketplace will be those that find new ways to use these interactive social technologies to build meaningful relationships with their customers.