• by Jack Loechner , Staff Writer @mp_research, March 7, 2008

Elusive Consumers Create Marketers' Needs F or Branded Entertainment

According to research released recently by PQ Media, spending on branded entertainment marketing grew 14.7% to an all-time high of $22.3 billion in 2007, nearly doubling in size over the last five years as brand marketers continue to shift budgets from traditional advertising to alternative marketing strategies which include:

• Event sponsorship and marketing
• Product placement
• Advergaming and webisodes

This marketing strategy that integrate products into entertainment venues that provide high engagement and interactivity, represented approximately 8 cents of every marketing services dollar spent in 2007, according to PQ Media. And the market for branded entertainment is projected to expand another 13.9% in 2008 to $25.41 billion, despite slowing overall economic growth.

Patrick Quinn, President & CEO of PQ Media, said "... there are strong secular trends driving investment from traditional advertising media to alternative marketing strategies... Americans are spending more time outside their homes, online at work, communicating via wireless devices and multitasking with various media, which has created a generation of elusive consumers for brand marketers to reach... (leading) to increased investment in alternative marketing tactics."

Key trends impacting each segment of branded entertainment include:

• Spending on event sponsorship and marketing, the largest segment of branded entertainment, rose 12.2% to $19.18 billion in 2007. Event sponsorship and event marketing attract new customers by using face-to-face engagement
• Paid product placement spending grew 33.7% to $2.90 billion in 2007, and at a compound annual growth rate (CAGR) of 40.8% from 2002 to 2007
• Spending on advergaming and webisodes increased 34.8% to $217.0 million in 2007, fueled by efforts among marketers to reach the elusive 18- to 34-year-old demographic. Advergaming and webisodes, while the smallest branded entertainment segment, is the fastest growing, climbing at a 51.7% CAGR from 2002 to 2007

Branded entertainment is expected to grow at a double-digit pace in 2008, driven by nearly $9 billion in event marketing spend, robust product placement spending, particularly on reality programming, at $3.5 billion, up nearly 25%, and growth in webisodes of 46%, as major networks begin to produce full-length online episodes in an effort to tap the coveted youth market.

The outlook for branded entertainment marketing through 2012, says the report, is for double-digit growth overall, despite slower economic expansion in the period. The sector is projected to grow at a 12.8% CAGR from 2007 to 2012, exceeding $40 billion.

For additional information from PQ Media, please visit them here.