• by Joe Mandese  @mp_joemandese, July 26, 2005

Product placement has become the cause celebre on Madison Avenue, transforming the TV advertising marketplace. But a new report shows it is a much bigger deal that has influenced virtually all forms of media, even supposedly sacrosanct print outlets such as newspapers and magazines where paid placements are that fastest growing segment of the business. Although highly controversial, the total value of product placements in magazines is on pace to grow 17.5 percent in 2005 to $160.9 million, and product placements in newspapers is projected to rise 16.9 percent to $65.0 million, estimates Stamford, CT-based PQ Media, one of the most respected researchers tracking the economics of media.

"Publishers are becoming increasingly receptive to use the practice," says Patrick Quinn, president and founder of PQ Media, which will officially release the new report tracking product placement in so-called "other media" on Wednesday. By other media, PQ means media other than the product placement mainstays of television and theatrical movies. While TV and films account for 90 percent of all product placements, PQ estimates other media account for 18.1 percent, or $384.9 million, according to an early look provided to MediaDailyNews.

The report reveals that product placement is influencing every segments of media, including print, videogames, online, books and even radio and recorded music (see related story on "payola" in today's MDN). In fact, just about the only medium not tracked in the report is outdoor and place-based media, which appear to offer the ultimate panacea for the main factors driving product placement deals: clutter, media multitasking and ad-skipping.

While product placement in print is still relatively small compared to the billions spent advertising in newspapers and magazines, the rapid rise of the practice may alarm some print industry watchdogs, especially top editors who've been seeking to keep the practice at bay. During the Association of National Advertisers' 2005 Print Advertising Forum in New York last month, top editors representing the American Society of Magazine Editors denied their publications - or any major magazine titles - accepted product placements, certainly not the kind of paid placements detected by the PQ report. But advertisers and agency executives speaking at that same forum implied the practice was pervasive, as did a survey of ANA members released at the conference, which showed magazines to be the second most common medium for product placement deals after television.

The PQ report would seem to support that conclusion despite the protestations of editors.

. The report projects consumer magazines will take in $15.6 million worth of paid product placement deals in 2005, an increase of 68.6 percent from 2004, making that sector the fastest growing of all forms of media product placement. Paid product placements in newspapers, meanwhile, are on track to grow 67.0 percent to $4.7 million. While those numbers are small for newspapers, the presence of any paid placements would seem troubling for editors or pride themselves on presenting objective news content that supposedly is not influenced by advertisers or other business interests.

But some newspapers publishers are finding creative means of integrating brands into their news well, including so-called "shadow" placements, in which brand images, logos or icons appear as watermarks on heavily type-ridden pages, such as stock and weather pages.

Ironically, PQ that newspapers are the second largest segment overall of product placement among "other" media, with a total value of $55.6 million in 2004, and nearly a quarter of those deals - $12.8 million - went to prestigious papers in the top five markets, including: The Wall Street Journal, The New York Times, USA Today, The Los Angeles Times and the Chicago Tribune.

Similarly, the biggest segment of product placement in consumer magazines is not smaller titles, or obscure special interest publications, but is one of the biggest categories of all: "General interest women's titles contributed the highest share of product placement spending at $35.5 million for the year," notes the report, adding, "No other general interest or special interest consumer magazine category generated more than $10 million for the year, led by special interest home titles at $8.7 million."

While consumer magazines were the largest overall "other" medium for product placement deals, PQ notes that new digital media, especially online and videogames are among the fastest growing sectors, especially for paid placements.

Unlike most other major media, the videogame industry, a specialty practice of so-called "in-game" advertising has emerged as a formal part of the medium's advertising sales efforts.

PQ's Quinn says while the motivations of advertisers and agencies are obvious, the push for product placement revenues by media owners is coming more out of necessity. "They're searching for new sources of revenue to replace the ones that are eroding," he says.