Global Paid Product Placement to Top $3 Billion in 2006

Global paid product placement spending surged 42.2 percent 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, according to research released today by PQ Media, a custom media research firm.

Global paid product placement spending in TV, film and other media is expected to climb another 38.8 percent to $3.07 billion in 2006, according to the PQ Media Global Product Placement Forecast 2006.

Global paid product placement spending will grow at a compound annual rate of 27.9 percent 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 percent compounded annually to $13.96 billion in 2010.

The US is by far the world’s largest paid product placement market at $1.50 billion in 2005, up 48.7 percent, making the US the world’s fastest growing market as well. Brazil and Australia are the next two largest markets for paid placement spending at $285.3 million and $104.3 million, respectively, in 2005. On the strength of its paid film placement market, France ranks fourth, followed by Japan.

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 predicts that this will change by year-end 2007, when the EU is expected to liberalize restrictions.

The majority of spending in the US and abroad comes from five key product categories: transportation & parts, apparel & accessories, food & beverage, travel & leisure, and media & entertainment.

Although the share of barter and added-value arrangements is declining, these types of non-paid placements are still used. To determine the value of non-paid placements, PQ Media used the iTVX Q-Ratio. The overall value of the global product placement market, including the barter/exposure value of non-paid placements, grew 27.9 percent to $5.99 billion in 2005, and is projected to expand another 24.3 percent to $7.45 billion in 2006.