Forrester Sees 17 Percent CAGR for Digital Adverting Through 2014

Forrester remains bullish on all categories of digital ad spending in the long range. Analyst Shar VanBoskirk presented the research firm’s five-year forecast for interactive ad spending in a blog post yesterday. The upshot: digital ad spending will increase at a 17 percent compound annual growth rate (CAGR) for the next five years, to $55 billion in 2014. While all categories (search, display, e-mail, mobile, and social) are expected to grow, mobile and social marketing will show the biggest acceleration.

Here are the projected CAGRs for each category, as well as their anticipated total spend in 2014:

Mobile: 27 percent CAGR to $1.3 billion
Social: 34 percent CAGR to $3.1 billion
E-mail: 11 percent CAGR to $2.1 billion
Display: 17 percent CAGR to $16.9 billion
Search: 15 percent CAGR to $31.6 billion

Forrester says interactive budgets will grow at the expense of traditional marketing. Sixty percent of respondents said they will grow digital budgets by shifting money away from other channels. Not surprisingly, direct mail and print media (newspapers and magazines) will be hardest hit. Among offline media, radio ads, telemarketing and outdoor ads were least likely to be drained in order to expand the Web ad spend.