US Digital Marketing Spend Will Near $120 Billion By 2021
Forrester has been sizing spend on online and digital media for nearly 20 years. Our latest forecast points out that marketers will invest in quality over quantity over the next five years. So what does this mean for digital marketing budgets? Here are four key takeaways:
US digital marketing spend will near $120 billion by 2021. Investment in paid search, display advertising, social media advertising, online video advertising and email marketing will pace to 46% of all advertising in five years.
Working budgets will give ground to non-working ones. Overall, digital marketing is pacing at a healthy 11% compound annual growth rate between now and 2021. But this is not the experimental “spend on anything to see what works” investment that we saw between 2008-2012. Marketers are more mature now with capable measurement practices. This means they will spend judiciously on just what works for their goals. And many are dialing back pure digital advertising investment, prioritizing instead non-working investments in data, technology and customer experience.
Millennial buying power will drive increased spend. Total digital investment is growing even with budgets shifting away from volume and toward value. A bullish economy contributes to this. But the headline here is that Millennials – consumers between 18 and 35 years old – have settled into a high-spending life stage as they establish careers, homes and families. This is now the largest living generation; it spends collectively $600 billion a year. Brands will grow digital investment in order to connect with these digital natives.
Online video will see the most upward mobility. Big and small advertisers alike love the reach and targetability of online video. Spend on online video is up 114% since 2014. Brand advertisers like that online video extends their TV and web reach with marginal incremental costs. Mom and Pop shops feel it gives them a TV-like advertising presence but more affordably than traditional television ads.
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