Forrester reports advertising shift to online

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May 3, 2005

Cambridge, Mass.—Nearly half of marketers surveyed said they plan to decrease spending in traditional advertising channels this year to fund an increase in online ad spending, according to a report by Forrester Research.

Total U.S. online marketing spending will reach $14.7 billion this year, up 23% over 2004, according to the report. By 2010, online advertising and marketing will make up 8% of total ad spending, Forrester projected.

Search engine marketing is projected to grow by 33% this year and to reach $11.6 billion by 2010. Display advertising, which includes traditional banners and online sponsorships, will grow at an average annual rate of 11% over the next five years, reaching $8 billion by 2010.

The report was based on online surveys of 99 leading marketers, as well as data from previous Forrester studies.

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