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Forrester Predicts Daily Deals Will Die

  |  August 25, 2011   |  Comments

Search marketing share will shrink as display advertising rallies.

Consultancy Forrester predicts that daily deals will die.

In its report "U.S. Interactive Marketing Forecast, 2011 to 2016," Forrester analysts describe a scenario whereby marketers and consumers alike will become addicted to Groupon-like daily deals and essentially overdose on them.

"Consumers will grow so conditioned to micro-impulse offers that they’ll lose practice at considered decisions - in all walks of life, not just when buying spa treatments," wrote Shar VanBoskirk, a Forester analyst and the report's author. "Facing a cultural descent into maladroit judgment, employers (and spouses) will blacklist impulse deals to keep people intentional."

The consultancy also predicts that spending on search marketing will increase in the coming five years, but at a slower rate than budgets for display, mobile, and social media marketing. This will happen, the consultancy found, because a portion of marketers' search budgets will move to mobile and social networks as users rely more on nontraditional search engines like YouTube or Facebook.

Overall by 2016, Forrester expects advertisers to spend $77 billion on interactive marketing.

The consultancy broke out spending estimates in 2016 versus 2011 in these categories:

  • Search marketing: $33.3 billion, up 78 percent over the five-year period. 18.7
  • Display advertising: $27.6 billion, up 152 percent.10.95
  • Mobile marketing: $8.2 billion, up 399 percent. 1.7
  • Social media marketing: $5 billion, up 214 percent. 1.59
  • Email marketing: $2.5 billion, up 63 percent. 1.5

The report points out that spending on social media advertising is relatively low cost compared to search advertising. "Developing owned social assets like a Facebook page could run as much as $1 million, but this is a one-time cost. Compare these fees to a paid search budget for example, which ranges between $500,000 and $3 million per month," the report found. The forecast for social media marketing also does not take into account internal resources at companies to build and oversee social media assets.


Anna Maria Virzi

Anna Maria Virzi, ClickZ's executive editor from 2007 until 2012, covered Internet business and technology since 1996. She was on the launch team for Ziff Davis Media's Baseline and also worked at Forbes.com, Web Week, Internet World, and the Connecticut Post.

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