Global Paid Product Placement Surged 42.2% In 2005

The PQ Media Global Product Placement Forecast 2006 says that global paid product placement spending in TV, film and other media is expected to climb another 38.8% 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.

The report shows that, 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. However, PQ Media’s Global Opinion Leader Panel believes this will change by year-end 2007, when the European Union is expected to liberalize restrictions encumbering growth in this region, fuelling significant upside in some European markets.

Patrick Quinn, president of PQ Media, said: “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 fuelled a dramatic increase in the value of seamless brand integration.”

PQ Media says that the US is by far the world’s largest paid product placement market at $1.50 billion in 2005, up 48.7%, 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.

France ranks fourth on the strength of its paid film placement market, followed by Japan. PQ Media’s report also shows 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 & parts, apparel & accessories, food & beverage, travel & leisure, and media & entertainment.

PQ Media forecasts that global paid product placement spending will grow at a compound annual rate of 27.9% 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% compounded annually to $13.96 billion in 2010.