Measuring Product Placement Success
President Patrick Quinn
and Vice President Research Director Leo Kivijarv
Listen to AUDIO of the Interview >>

PQ Media in the News:

Media research and consulting firm PQ Media’s president Patrick Quinn and vice president research director Leo Kivijarv join us to discuss the growing industry of branded entertainment and product placement.

Inside Branded Entertainment will help you find out how fast the market is growing, why traditional ad spending is taking a back seat to alternative media spending, about noteworthy forecasts for 2006 and more.


Interview Highlights:

About PQ Media

  • PQ Media, founded in 2002, is a media research firm that has two practice areas: traditional communications; and alternative advertising and marketing.
  • The company provides custom research and consulting as well as syndicated research on traditional and alternative media.
  • Last year, PQ Media published, “Product Placement Spending in Media,” the first report to size, structure and forecast the U.S. product placement market.


Growing Product Placement Market

  • In 2004, PQ Media estimated that the total value of the product placement market grew 30.5%, which was an acceleration of 20.2% growth from 2003.
  • Much of that growth was driven by paid product placement in television programs, due to the reality television phenomenon in the past couple of years.
  • PQ Media forecasts that next year there will be double-digit growth once again.
  • 3.5 billion is the value of product placements (not actual spending) in film, media, newspapers, magazines, Internet, video games, radio and books for 2004.
  • And as we go into 2005, it’s estimated that the total value of product placements will grow to 4.2 – 4.3 billion.


Types of Financial Deals

  • Paid, where there is actually money that changes hands.
  • Barter, where the placement product itself is of financial value.
  • Gratis, where the placement just happens.
  • Only about a third of that 3.46 billion for 2004 and the estimated 4.24 billion for 2005 are actually paid placements.
  • Over 60% of placements continue to be barter arrangements.


Traditional Ad Spending Growth Getting Trumped

  • Product placement spending is already growing at a much faster, double-digit rate than traditional advertising spending.
  • While paid placements are over a billion dollars this year, the television industry has an aggregate of 45-50 billion dollars in 2004, and only growing at a single-digit rate.
  • Product placement spending won’t overcome television advertising as an aggregate for any time in the near future, since it’s about fifty-to-one in terms of size.
  • The same is true for the larger alternative advertising and marketing industry, including branded entertainment, digital out of home, satellite advertising, blogs, advergaming and podcasts. All these emerging new medias are growing at double-digit rates.


Why the Shift in Spending?

  • There is skepticism of the effectiveness of the traditional thirty-second television spot.
  • The research that suggestions that the 18 – 34 year old generation is using less and less of traditional media, such as newspapers, magazines and other forms of print media.
  • Digital media such as the Internet, iPod and wireless communications are increasing at very high rates.


What’s Hot for Advertisers

  • A lot of people are looking at blog advertising or blogvertising, which is currently less than a 10 million dollar industry.
  • Even though a lot of new and emerging media are getting the highest growth rates, dollar amounts aren’t as high as traditional media.
  • Major brand marketers are less adverse to risk than they have been in the past few years. They are willing to use new media to try to reach coveted audiences such as the 18- to 34-year-old demographic.


Upcoming Research Reports

  • An alternative advertising and marketing research series beginning in February 2006, which includes branded entertainment and product placement.

The global branded entertainment forecast to be published in the first half of 2006, which is built on the product placement spending and media report that PQ Media created in March of 2005, covering the U.S. product placement market.

  1. This report will include hot, fast growing markets such as Asia, Europe and parts of the Middle East.
  2. ITVX, a leader in product placement quality measurement will be collaborating with PQMedia on market profiles on a global basis.


Surprise Findings

  • There is a great amount of interest outside the borders of the United States in product placement and branded entertainment. PQ Media looks to be the first to serve those markets.
  • The only thing that has really changed dramatically in the nine months was in the region upfront market. During the upfront, many ad negotiations were tied to product placement, especially in broadcast television. Here you can read more about us.


Forecasts for 2006

  • 2006 is going to be a watershed year for alternative advertising and marketing. There’s a lot of money being shifted.
  • Marketers will continue to take risks on non-traditional ad spending because they don’t want to be left behind.
  • The value of the U.S. product placement market will be expanding again at 22.7% in 2006.
  • Measurement is becoming more and more important in terms of the value of the placements because so many more people (writers, producers, networks. etc.) want part of the branded entertainment campaign’s pie.