Tuesday, September 19, 2006

Paid Product Placement Outpaces Traditional Advertising

According to the PQ Media Global Product Placement Forecast 2006, global paid product placement spending surged 42.2% to $2.21 billion in 2005 with double-digit growth expected to continue in 2006 and beyond. Product placement spending in TV, film and other media is expected to climb another 38.8% to $3.07 billion in 2006, driven by the continued shift toward a paid placement structure from a barter and added-value model.

Patrick Quinn, president of PQ Media, said "Product placement has evolved from a novel marketing tactic to a key marketing strategy on a global scale. This trend is significant in that there is a new media order emerging worldwide in which fear of ad-skipping technology, doubts about traditional advertising's effectiveness, and declining government media subsidies have fueled a dramatic increase in the value of seamless brand integration."

The US is by far the world's largest paid product placement market at $1.50 billion in 2005, up 48.7%. Additionally, in 2005:

Brazil ranks second with paid placement spending at $285.3 million
Australia at $104.3 million
France ranks fourth
Japan, fifth

The majority of spending in the US and abroad is derived from five key product categories: transportation & parts, apparel & accessories, food & beverage, travel & leisure, and media & entertainment.

PQ Media forecasts that global paid product placement spending will grow at a compound annual rate of 27.9% in the 2005-2010 period to $7.55 billion, as product placement growth continues to significantly outpace that of traditional advertising and marketing.

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