Product Placement An Emerging Brand Marketing Solution

by Jack Loechner, Jan 14, 2013, 6:15 AM

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According to the PQ Media Global Product Placement Spending Forecast 2012-2016, US marketers continue to up their investment in product placement to connect with harder-to-reach, multitasking consumers who are using digital and wireless technology to consume content more often and to view advertising less frequently.

Strong growth in four of the past five years fueled a 12.6% compound annual growth rate for global product placement spending in the 2006-11 period, driven by a 12.8% CAGR for paid product placements in the US. The total US product placement spending is expected to finish in 2012 to $4.75 billion, fueled by strong growth in paid integrations on TV, internet, mobile and music media, as brands pursue alternative marketing solutions.

Product placement, as defined in this study, is a marketing tactic used by advertisers in which the objective is to integrate brand names, logos or products into non-ad content of media, such as TV, film, internet, mobile, videogames and music. The study included only product placement arrangements in which there is a financial transaction in the forecast, (i.e. no non-paid placements).

The vast majority of paid placements take place in television and film, in which US spending on TV integrations, the largest category, increased 11% to $2.83 billion in 2011. (ed note: the summary report includes available final data through 2011, though 2012 expectations are shown where possible, and the complete report includes forecast data through 2016)

Paid placements in US films increased 8.4% to $977 million in 2011, boosted by brand integrations in highly anticipated blockbuster releases and growth in automotive placements. Global spending on product integrations in movies rose to $1.53 billion in 2011, as global brands much prefer TV for placements due to uncertainties associated with filmmaking in various markets. Global spending on TV placements rose 10.9% in 2011 to $4.76 billion, due to the relaxation of TV regulations in Europe and Asia.

The internet/mobile category grew the fastest in 2011, as US spending surged 24.5% to $61 million and global spending jumped 27.9% to $188 million. Growth was fueled by marketers investing more in brand integrations targeted at heavy users of internet and social media.

The US remains the world's largest product placement market, accounting for 57.6% of total spending in 2011. No other market generated more than $1 billion, although Brazil and Mexico each surpassed $500 million, while Australia, Japan, France, the UK and Italy exceeded $100 million. China was the fastest-growing market, expanding to $81 million, as more global brands use product placement in Chinese television and films.

Patrick Quinn, CEO of PQ Media, concludes that  "... technological advancements... fast-moving, 21st century end users... increased accessibility to content and faster media consumption... (are) driving brands to invest in alternative media tactics... “

The PQ Media Global Product Placement Spending Forecast 2012-2016, including 64 pages of analysis and 39 data tables, is available from PQ Media here.

 

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