Forrester: Digital media spending to hit $118B by 2021
- Forrester’s US Digital Marketing Forecast: 2016 to 2021, which the company shared with Marketing Dive, anticipates that digital media spending will reach $118 billion by 2021, but spending is expected to slow as marketers begin emphasizing quality over quantity in digital ad spending.
- In terms of individual advertising channels, paid search is expected to consume the majority of ad budgets but at a compound annual growth rate of only 8%, and display — an expansive category — will come in second with a more impressive 13% CAGR while online video will grow at a rate of 18%.
- “Within the next five years, we anticipate investment in ad impressions going down. Instead, marketing budgets will go towards brand experiences, CX and in-store experiences and knowledge of sales agents — the things that will help demonstrate brand promise. Many companies now are wasting impressions, which can annoy customers,"” said Shar VanBoskirk, Principal Analyst at Forrester, in a statement.
The digital marketing vendor landscape is likely to evolve as the demand for better quality experiences grows with new entrants and consolidation on the horizon. One of the more surprising takeaways from the report is that Forrester believes the current publisher and programmatic landscape won’t be able to support the premium ad experiences that the forecast sees advertisers demanding. At the moment programmatic remains a growing portion of digital ad buying and selling, including for premium formats like native ads.
In addition to the demand for quality, several other factors will support a reduction in digital marketing spend, including the arrival of better measurement leading to smarter spending, a shift from communications to experiences in marketing, and technology and data spending eating into media budgets.
While individual marketers may reduce their digital spend, several macro factors will continue to drive overall digital growth such as the health of the U.S. economy, the buying power of digital natives, the increasing dependence on digital media and the ongoing adoption of mobile.