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Global paid product placement spending up 42% to $2 bn+ in 2005: PQ Media
 

Indiantelevision.com Team

(18 August 2006 2:00 pm)

 

MUMBAI: Global paid product placement spending surged 42.2 per cent to $2.21 billion in 2005 with double-digit growth expected to continue in 2006 and beyond, as brand marketers scramble to effectively engage consumers worldwide.

These findings were released by research firm PQ Media.


Global paid product placement spending in TV, film and other media is expected to climb another 38.8 per cent to $3.07 billion in 2006, driven by the continued shift in the world's leading markets toward a paid placement structure from a barter and added-value model, according to the PQ Media Global Product Placement Forecast 2006.

PQ Media forecasts that global paid product placement spending will grow at a compound annual rate of 27.9 per cent in the 2005-2010 period to $7.55 billion, as product placement growth continues to significantly outpace that of traditional advertising and marketing. The overall value of the worldwide product placement market, including the barter/exposure value of non-paid placements, will increase 18.4 per cent compounded annually to $13.96 billion in 2010.


While the markets in the Americas and Asia tend to be more free-wheeling with regulations vague or nonexistent in some cases, the transition is moving slower in Europe due to stricter rules governing the use of product placement. But PQ Media's Global Opinion Leader Panel believes this will change by end-2007, when the European Union is expected to liberalise restrictions encumbering growth in this region, fueling significant upside in some European markets.


"Product placement has evolved from a novel marketing tactic to a key marketing strategy on a global scale, as brand marketers seek more effective methods to make important emotional connections with consumers. 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," said PQ Media president Patrick Quinn.

The US is by far the world's largest paid product placement market at $1.50 billion in 2005, up 48.7 per cent, making the US the world's fastest growing market as well. The US market tends to be much more advanced than other countries, and it is the model to which most other countries aspire.

Brazil and Australia are the next two largest markets for paid placement spending at $285.3 million and $104.3 million, respectively, in 2005, according to the PQ Media Global Product Placement Forecast 2006. On the strength of its paid film placement market, France ranks fourth, followed by Japan.

PQ Media's report also reveals that product placement methods vary widely by country, with processes driven by varying cultures and regulatory climates. The majority of spending in the US and abroad is derived from five key product categories: transportation and parts, apparel and accessories, food and beverage, travel and leisure, and media and entertainment.

Although the share of barter and added-value arrangements is declining, these types of non-paid placements are still used often throughout the world. To determine the value of non-paid placements, PQ Media used the iTVX Q-Ratio, a widely used product placement valuation tool. The overall value of the global product placement market, including the barter/exposure value of non-paid placements, grew 27.9 per cent to $5.99 billion in 2005, and is projected to expand another 24.3 per cent to $7.45 billion in 2006, according to the PQ Media Global Product Placement Forecast 2006.

 

 
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