Indiantelevision.com Team

(19 March 2007 6:00 pm)

MUMBAI: Global paid product placement grew 37.2 per cent to $3.36 billion in 2006 and is forecast to grow 30.3 per cent to $4.38 billion in 2007.

China will be the world’s fastest-growing product placement market in 2007 with spending growth of 34.5 per cent, trailed by the US, Italy, India and Canada.

Growth will be driven by relaxed European regulations, emerging Asian markets and shifting American models. These findings are contained in research released by PQ Media, which provides alternative media econometrics.

While the US remains the largest global market for product placement, accounting for two-thirds of spending, growth will decelerate over the next four years, although remaining in the double-digits.

Meanwhile, growth in the European and Asian placement markets will accelerate going forward, as legal restraints are loosened and global brand marketers move to capitalise on emerging opportunities in these regions, according to the PQ Media Global Product Placement Forecast Series 2006-2010: Country-by-Country Analysis. This new research series features individual reports on the 15 markets in Europe, Asia and the Americas, including data and analysis covering the period from 2000 to 2010.

Key drivers of global product placement growth in 2007 and beyond include the relaxation of rules governing paid television placements in European countries through the “Television without Frontiers” directive, particularly in the UK, Spain and Italy; the evolution and growth of product placement markets in Asia, especially in China, India and Australia; and the continuing transition from non-paid to paid placement models in the Americas, primarily in the United States, Mexico and Brazil.

PQ Media president, CEO Patrick Quinn says, “As a new media order has emerged in recent years, our research indicates that we are entering an era of alternative advertising and marketing strategies.

“Brand marketers are seeking to better engage consumers with emotional connections and media companies are searching for new revenue streams as traditional advertising methods suffer from negative perceptions. As a result, product placement has emerged from a novel marketing tactic just a few years ago to a key marketing strategy worldwide.”

TV placements remain the dominant choice of brand marketers, accounting for 71.4 per cent of global spending in 2006 at $2.40 billion, with projected growth of 33.9 per cent in 2007. Film placements comprised 26.4 per cent, or $885.1 million, of global spending in 2006 with forecasted growth of 20.5 per cent this year, driven by more cross-promotional packages linking movie placements to ad spots, websites and point-of-purchase displays, as well as virtual embedding for local targeting. While placements in other media account for only 2% of total spending, growth will exceed 30% over the next several years due to increased demand for videogame and online placements aimed at the elusive 18- to 34-year-old demographic.

The Americas will remain the largest and fastest-growing region for paid product placement in 2007, with projected spending of $3.79 billion and growth of 31.2 per cent followed by Asia and Europe. The US will remain the world’s largest market for product placement in 2007 with spending of $2.90 billion, followed by Brazil, Mexico, Australia, and Japan.

Although the share of non-paid placements, including barter and added-value arrangements, is declining, these types of placements are still used often throughout the world. To determine the value of non-paid placements, PQ Media employed the iTVX Q-Ratio, the product placement valuation tool.

The overall value of the global product placement market, including the exposure value of non-paid placements, grew 24.2 per cent to $7.76 billion in 2006 and is projected to increase 20.3 per cent to $9.33 billion in 2007.