The U.S. interactive ad market is expected to skyrocket to $28 billion in 2017, according to forecasts by Forrester. This climb is largely driven by video, which is expected to top $9 billion in 2017 -- averaging a 26 percent rise each year.
These U.S. numbers point to a saturated market, but Forrester says the next region to eye is Europe, which is expected to increase online display spend by 13 percent over the next five years. The report predicts online video and rich media to make up 76 percent of the online display ad market, reaching €5.8 billion (US$7.5 billion) in 2016.
Currently, interactive display media in the U.S. is on pace to hit $12.7 billion by the end of the year. The increases expected in interactive ads is in stark contrast to the offline ad market, which is expected to rise much more slowly at a 1.1 percent. rate. Much of offline's growth can be attributed to cable TV, expected to bring in a 4.1 percent annual growth.
Still, even with surging interactive ad spend, Forrester lowered its forecast by about 13 percent for the next five years, partially due to the relative cheapness of social media impressions. The firm predicts online video will make up a third of all online display ad spend by 2017, up from 23 percent this year. One of the biggest areas that advertisers will target in the coming five years is long-form videos, with the number of monthly long-form video views with ads to grow 32 percent, compared with 18 percent for short videos. It's also anticipated that long-form videos will also grow in length to increase more advertising opportunities.