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Wednesday, November 18, 2009

Industries holding off on interactive marketing are poised to spend a lot more

One of the most interesting observations I gleaned from Forrester’s recent projections is that some of the greatest growth in interactive marketing is likely to come from industries that have been slow to adopt it so far.

I would classify this under “blinding flashes of the obvious,” but it still jumped out at me because Forrester is suggesting that these industries—which include heavily regulated businesses like pharmaceuticals—will get the experience they need and move forward.

The Forrester report—US Interactive Marketing Forecast by Industry, 2009 to 2014 (which’ll set you back $1,749)—projects most growth coming from big offline advertisers, including media and entertainment, consumer goods, automotive, and healthcare. The report projects an 18% compound annual growth rate for healthcare and pharmaceuticals, which (along with the other offline advertisers) are currently being outspent by industries that routinely market directly to consumers. But the online experience these companies are gaining in their early experimentations with interactive marketing will drive future growth, according to Shar VanBoskirk, the report’s author. VanBoskirk notes:

Early social media trials for NEXIUM, Prilosec OTC, and AMBIEN CR have exceeded AstraZeneca Pharmaceuticals’ Procter & Gamble’s, and sanofi-aventis’ expectations, respectively, paving the way for more investment.

The report also predicts that business-to-business investment in interactive marketing will remain strong, which flies in the face of all the naysayers who insist that social media works best in the B2C marketplace. Interactive marketing in the B2B space will grow from $2.3 billion now to $4.8 billion in 2014, with adoption of newer techniques and improved sophistication of the efforts already underway, the report says. (Social media, of course, is just one of the categories of interactive marketing, which also includes search marketing, display advertising, email marketing, and mobile marketing.)

Overall, interactive marketing will account for nearly one-fifth of all marketing dollars by 2014, representing $55 billion worth of marketing budgets. The consequences of this shift from traditional to interactive marketing include smaller budgets in general and the demise of agencies that haven’t kept pace, according to the report.