Commentary

Digimedia, Telenovelas, AD-Skip And Post Boomers Drive Product Placement Growth

According to the new PQ Media Global Branded Entertainment Marketing Forecast 2015-19, expanding digimedia opportunities, potent telenovela series, ad-skip tech and highly mobile post-boomer generations will drive the 6th consecutive year of accelerated growth in product placement and faster consumer event pacing.

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Global branded entertainment revenues posted faster year-on-year growth in 2014, as paid placements in television, film and digital media, combined with consumer event marketing and sponsorships, posted a 6.3% increase to a record $73.27 billion. PQ Media projects global branded entertainment revenues to grow 6.8% in 2015 and generate an 8.1% CAGR in the 2015-19 period to $108.04 billion. The US market is forecast to expand 8% this year and rise at a 9.1% CAGR through 2019, exceeding $50 billion.

The US market represented almost half (47.1%) of the world’s branded entertainment industry, generating $34.53 billion in 2014, a 7.3% gain compared with the prior year. American brand marketers and their agency partners have become more sophisticated during the past decade in their strategic planning and tactical execution of TV placements.

Among the advanced strategies are increasing demand for integrations of products into scripts, instead of settling for background shots, and negotiating key placement deals to ensure close proximity to commercial breaks in which a brand’s product is slated to appear first in the ad pod of multiple spots, according to the report.

US marketers aren’t the only ones to become savvier in the use of various tactics to integrate brands into TV shows and movies, particularly in emerging markets like Brazil, Mexico and India, where product placements for many years were planned and executed on the fly at the request of an advertiser. More recently, entertainment marketing agencies have emerged in some of these markets to provide similar services to those operating in the US.

Product placement is the smaller, but faster-growing segment of branded entertainment with global revenues increasing 13.6% in 2014 to $10.58 billion, as the US, Brazil and Mexico combined to account for more than three-quarters of the totalj, says the report. Brands are focusing more placements in media content favored by younger audiences, with digimedia integrations producing the highest growth of the eight platforms tracked in the study, rising 35.8% in 2014, followed by the growing popularity of placements in recorded music and related music videos of leading pop artists, driving 15.9% growth.

Patrick Quinn, CEO & CCO, PQ Media, points out that “… the durability, creativity and consistent growth of branded entertainment… using multiple media to engage more elusive, distracted and younger audiences… is often shrouded by news coverage of a relatively small, but vociferous opposition to product placement… but (the study shows) that well executed branded entertainment not only works, but it’s capable of creating long-lasting emotional connections…” 

Quinn concludes by noting that “… leading brand marketers are seeking improved methods to engage younger audiences used to ad-skipping and on-demand media usage… branded entertainment provides omnichannel possibilities to more effectively engage post-boomers… particularly Millennials and iGens…”

Snapshot Summary of Key US Findings in the Study:

  • The US was the largest branded entertainment market worldwide in 2014 at $34.53 billion, representing almost half of all global revenue. The sector grew at a 7.3% rate, propelled by consumer event spending by political campaigns
  • More marketing budgets are expected to move from traditional to digital platforms.  As a result, branded entertainment revenue growth is expected to continue accelerating, rising 8% in 2015 to $37.29 billion, and posting a 9.1% CAGR during the 2015-19 period, reaching $53.33 billion in 2019
  • The US product placement marketing is outperforming most advertising & marketing platforms domestically, but only ranks near the bottom of the 15 leading markets worldwide due to less stringent regulations elsewhere, particularly Western Europe, that has spurred a more rapid growth from a very small base.
  • In 2015 the US product placement market is expected to grow by almost $800 million, which is larger than all the other markets with the exception of Brazil and Mexico
  • Consumer events will be the larger branded entertainment platforms in 2015, reaching over $30 billion, representing a mid-single digit gain, and is expected to post accelerating growth throughout the forecast period, rising at a high single-digit CAGR to over $40 billion in 2019

For more information from PQ Media, please visit here.

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