Dive Brief:

• Digital marketing spend will reach $146 billion by 2023, growing at a 9% compound annual growth rate (CAGR), according to a Forrester report shared with Marketing Dive. According to "The US Digital Marketing Forecast, 2018 to 2023," about half of marketers expect their search budgets to stay the same in 2019. The format will grow at a 7% CAGR, its slowest to date, to reach $60 billion by 2023.
• However, search ad budgets are predicted to shift to voice and voice-activated queries of voice assistants like Amazon's Alexa and Google Assistant will be mainstream in five years. Marketers will move from pay-per-click to voice skills, SEO, content on sites like Pinterest and branding to better capitalize on voice.
• Meanwhile, Amazon has taken some search share away from Google. Google's cost-per-click (CPC) declined 28% in Q3 2018, the 14th straight quarter of negative performance, but still was able to add network inventory and small business advertisers. 

Dive Insight:

The Forrester research sheds light on how marketers may be adapting their search strategies to account for a slowdown in the format's traditional channels, including by shifting more of their budgets to Amazon and voice. The findings reinforce how Amazon's skyrocketing ad revenue growth is posing more direct competition to the digital duopoly and to Google, in particular. 

Amazon's U.S. ad business is projected to grow more than 50% this year, grabbing 8.8% of the digital ad market, according to recent eMarketer forecasts. While Google's ad business is still healthy and accounts for 37.2% of the market, its share is slipping as CPC declines. More marketers, especially in categories like packaged goods, are also reportedly shifting some of the budgets traditionally allocated for Google search toward Amazon, since they value the e-commerce platform's ability to closely link advertising to a point of sale. 

Amazon's growth is additionally boosted by consumer behavior. More shoppers now begin their purchasing journeys on Amazon than Google. Marketers, including Sun Products and Baggalini, earned a 500% return on their Amazon ads, according to Forrester.

Voice is another key battleground between these and other tech companies. More than one-third of U.S. adults use smart home devices or services, per data cited in the Forrester report. Some marketers, like Capital One, Domino's, Humana and L'Oréal, have started to incorporate voice search into their strategies. To date, brands have mostly used voice to answer questions and offer provide customer service, but as more consumers adopt the technology, new opportunities to tap into voice will arise and potentially offer greater sources of revenue. 

Search overall remains a valuable marketing format, as 75% of consumers think paid search ads make it easier to find the information they search for on a website or search engine. Consumers also interact with search ads in different ways on different platforms, with 55% of those who click on Google search ads preferring text ads and 50% who click on Amazon ads preferring shopping and product listing ads.