PQ Media POV

PQ Media's Point of View

A Century Later, Product Placement Remains Relevant & Effective in a Digital Media Universe

By Patrick Quinn, President, PQ Media & Publisher, Global Product Placement Forecast Series

Global product placement spending grew an estimated 11.7% in 2012 to $8.25 billion, driven by strong expansion in the BRIC countries, accelerated deployment of TV integrations in Europe and a resurgent US market, according to the PQ Media Global Product Placement Spending Forecast 2012-16. While headlines tout the rapid growth of digital advertising and marketing online and via mobile devices, why are global brand marketers shifting back to a tactic that has been around for more than 100 years?

The simple answer is eyeballs versus technology. That is, TV remains the most consumed medium worldwide, as witnessed recently by the large global audience for the Super Bowl in the US. The Super Bowl, however, is an anomaly in that viewers often specifically watch commercials, based on numerous popularity metrics for the game. But, more often, other TV viewing is being done less in the present or on conventional TV sets, as time-shifting popular programs has become the norm, in part to avoid commercials. As a result, TV product placement has remained – even strengthened – as a valid brand strategy to engage as many eyeballs as possible without the disintermediation of ad-skipping DVRs.

But the simple answer is not the only answer. Rather, a major reason product placement spending grew at a double-digit rate in 2012 is the rising level of sophistication being employed to integrate brands into TV programs and movies worldwide. This is especially true in the emerging BRIC countries. Product placements in these four countries for many years were done haphazardly, often at the request of a brand to its agency. Increasingly, however, product placement agencies are being formed to enable professionals to work more closely with media producers in order to integrate brands effectively into scripts, similar to what has been done in the US for nearly two decades.

PQ Media's examination of the top 15 global product placement markets shows the three fastest-growing are Russia, India and China. While Brazil ranks sixth – its annual growth also trails South Korea and Germany – it's actually the second-largest product placement market in the world behind the US. In fact, the Brazilian market is three times the size of Russia, India and China combined. In addition, global brands are capitalizing on Brazil's vibrant telenovela genre, which is a key driver of product placement growth throughout Latin America, as well as in the US Hispanic media market.

Meanwhile, the fastest-growing media platforms for product placement are online and mobile devices, and the BRIC markets are leaders in tech-savvy audiences seeking original programming on digital devices, which lend themselves to creative product placements. Accordingly, brand marketers have upped their investments in product placement in an effort to connect with harder-to-reach, multitasking consumers who are using digital and wireless technology to consume content more often and to view advertising less frequently. Therefore, we expect the BRIC countries to remain a major driver behind product placement growth over the next several years, accentuated by expanding markets in the European Union, which only recently passed regulations allowing product placements on TV, the largest media platform.

The PQ Media Global Product Placement Spending Forecast 2012-16 is the industry's benchmark for spending, growth, analysis and insights, providing in-depth coverage of all three major global regions and 15 leading markets for the 2006-16 period. The Forecast includes 64 pages of analysis and 39 data tables. PQ Media is a leading provider of research, education and consulting services to the media, entertainment and technology industries. For more information about the data and insights in this article, visit the hyperlinks above or contact Gabriella Kallay at gkallay@pqmedia.com or 203-921-0368.