Product Placement Dipped Last Year for the First Time

But Only Fell Slightly and Is Poised for Big Growth

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LOS ANGELES ( -- As overall ad spending fell 12% in 2009, according to Kantar Media, marketers increasingly looked to their media partners to get their brands closer to content –- or, in many cases, created content themselves.

Kraft's Miracle Whip brand was featured in Lady Gaga's 'Telephone' video.
Kraft's Miracle Whip brand was featured in Lady Gaga's 'Telephone' video.
That's why branded entertainment marketing spending fell just 1.3% in 2009, to $24.62 billion, according to PQ Media, a Stamford, Connecticut-based marketing research firm that issued a five-year forecast report today with an outlook for branded entertainment spending from 2010 to 2014.

The 2009 dip in branded entertainment spending marks the first time the sector has posted an annual decrease since PQ Media first started tracking the industry in 1975. Consumer events spending, which represents the largest swath of branded entertainment tracked by PQ Media, fell 1.1% to $21.02 billion as event budgets were slashed across the board.

Paid product placement in TV, movies, internet, videogames and other media was also challenged, slipping 2.8% to $3.61 billion last year, its first year-over-year decline. However, paid product placement is also one of the sectors poised for the most growth, with PQ Media predicting the 2009 figures to more than double by 2014, when product placement is projected to be a $6.1 billion market.

"It used to be that product placement was an added-value model, where you'd buy this much commercial time and the networks would throw in these product placements for you," said Patrick Quinn, CEO of PQ Media. "Now you have all these agencies whose job is to add brands into scripts, making the real estate of the screen more and more important."

The agencies brokering many of the biggest product placement and branded content deals are already seeing major year-to-date growth, from Group M's Mediaedge:cia, Mediacom and Mindshare to Publicis' recently restructured branded entertainment unit, Liquid Thread, combining the entertainment units of Starcom Entertainment, Mediavest's Connective Tissue and Pixel.

Other growth areas for branded entertainment include recorded music, from paid product placement in music videos such as Lady Gaga's "Telephone" to brand mentions in songs themselves, like Black Eyed Peas' recent jingles for Pepsi and Chris Brown's 2008 single for Wrigley, "Forever." Product placement spending on recorded music grew nearly 10% in 2009 and accounted for about 15% to 20% of the $103 million in spending that PQ Media classifies as "other media," a category that also includes newspapers, books, magazines and radio.

The future growth of product placement and branded content will rely more heavily on brands taking production and distribution into their own hands, said Doug Scott, president of WPP's Ogilvy Entertainment. "More and more brands are looking at how to get smarter with their media dollars and see it as a blended approach of media plus production," Mr. Scott said.

"I think the nature of the deals being done will significantly change over the next 12 to 18 months," he added.

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