Executive Summary
Global Product Placement Forecast 2012-2016 An exclusive primary research source from PQ Media: Management Team Patrick Quinn, President/CEO Leo Kivijarv, Ph.D., Vice President/Research Tabor Ames, Vice President/Marketing Gabriella Kallay, Director, Operations/Sales Marina Velez, Research Manager Except by express prior written permission from PQ Media LLC, no part of this work may be copied or publicly distributed, displayed or disseminated by any means of publication or communication now known or developed hereafter, including in or by any: (i) directory or compilation or other printed publication; (ii) information storage or retrieval system; (iii) electronic device, including any analog or digital visual or audiovisual device or product. PQ Media will protect and defend its copyright and all its other rights in this publication, including under the laws of copyright, misappropriation, trade secrets and unfair competition. All information and data contained in this report is obtained by PQ Media from sources that PQ Media believes to be accurate and reliable. However, errors and omissions in this report may result from human error and malfunctions in electronic conversion and transmission of textual and numeric data. As a result, PQ Media is not responsible for any potential, perceived or real negative effects, loss of revenue, loss of profits, missed forecasts or any other potential, perceived or real detrimental impacts to any individual person or business entity of any kind stemming from the use of any of the data and/or information contained in this report. Copyright 2012 PQ Media LLC All rights reserved PQ Media LLC Two Stamford Landing Suite 100 Stamford, CT 06902 203-921-0368 203-921-0367 (Fax) www.pqmedia.com info@pqmedia.com PQ Media 2012 Copying Prohibited Page 2
Tables of Contents Methodology 6 Definitions & Segmentation 7 Executive Summary 9 Key Takeaways 10 Global Product Placement Analysis, 2006-11 11 Global Product Placement Forecast, 2012-16 14 US Product Placement 17 Key Takeaways 18 US Product Placement Analysis, 2006-11 19 U.S. Television Product Placement Analysis 21 U.S. Film Product Placement Analysis 25 U.S. Videogame Product Placement Analysis 27 U.S. Internet & Mobile Product Placement Analysis 28 U.S. Music Product Placement Analysis 29 U.S. Other Media Product Placement Analysis 30 US Product Placement Forecast, 2012-16 31 Global Product Placement 33 Key Takeaways 34 Global Product Placement Analysis, 2006-11 41 The Americas Product Placement Analysis, 2006-11 36 United States Product Placement Analysis 36 Brazil Product Placement Analysis 36 Mexico Product Placement Analysis 38 Canada Product Placement Analysis 39 Rest of the Americas Product Placement Analysis 40 Asia-Pacific Product Placement Analysis, 2006-11 42 Australia Product Placement Analysis 42 Japan Product Placement Analysis 44 India Product Placement Analysis 45 China Product Placement Analysis 47 South Korea Product Placement Analysis 48 Rest of Asia-Pacific Product Placement Analysis 50 Europe, Middle East & Africa Product Placement Analysis, 2006-11 51 France Product Placement Analysis 52 United Kingdom Product Placement Analysis 53 Italy Product Placement Analysis 55 Germany Product Placement Analysis 57 Spain Product Placement Analysis 58 Russia Product Placement Analysis 59 Rest of Europe, Middle East & Africa Product Placement Analysis 60 Global Product Placement Forecast, 2012-16 62 PQ Media 2012 Copying Prohibited Page 3
Data Tables & Charts Executive Summary 1.1 Global Product Placement Spending by Region, 2006-11 11 1.2 Global Product Placement Spending & Growth by Market, 2011 12 1.3 Global Product Placement Spending by Medium, 2006-11 13 1.4 Global Product Placement Forecast by Region, 2011-16 14 1.5 Global Product Placement Forecast & CAGR by Market, 2016 15 1.6 Global Product Placement Forecast by Medium, 2011-16 15 U.S. Product Placement 2.1 U.S. Product Placement Spending by Medium, 2006-11 19 2.2 Shares of Product Placement Spending by Medium, 2011 20 2.3 US Television Product Placement Spending, 2006-11 22 2.4 Top 10 Primetime TV Shows by Product Placements, 2011 22 2.5 Top 10 TV Product Placements by Viewer Recall, 2011 23 2.6 US Film Product Placement Spending, 2006-11 25 2.7 US Videogame Product Placement Spending, 2006-11 27 2.8 US Internet & Mobile Product Placement Spending, 2006-11 28 2.9 US Music Product Placement Spending, 2006-11 29 2.10 US Other Media Product Placement Spending, 2006-11 30 2.11 US Product Placement Forecast by Medium, 2011-16 31 Global Product Placement 3.1 Global Product Placement Spending by Region, 2006-11 35 3.2 Americas Product Placement Spending by Market, 2006-11 36 3.3 Brazil Product Placement Spending, 2006-11 37 3.4 Brazil Product Placement Forecast, 2011-16 37 3.5 Mexico Product Placement Spending, 2006-11 38 3.6 Mexico Product Placement Forecast, 2011-16 39 3.7 Canada Product Placement Spending, 2006-11 39 3.8 Canada Product Placement Forecast, 2011-16 40 3.9 Rest of the Americas Product Placement Spending, 2006-11 41 3.10 Rest of the Americas Product Placement Forecast, 2011-16 41 3.11 Asia-Pacific Product Placement Spending by Market, 2006-11 42 3.12 Australia Product Placement Spending, 2006-11 43 3.13 Australia Product Placement Forecast, 2011-16 44 3.14 Japan Product Placement Spending, 2006-11 44 3.15 Japan Product Placement Forecast, 2011-16 45 3.16 India Product Placement Spending, 2006-11 46 3.17 India Product Placement Forecast, 2011-16 46 3.18 China Product Placement Spending, 2006-11 47 3.19 China Product Placement Forecast, 2011-16 48 3.20 South Korea Product Placement Spending, 2006-11 49 3.21 South Korea Product Placement Forecast, 2011-16 50 3.22 Rest of Asia-Pacific Product Placement Spending, 2006-11 50 3.23 Rest of Asia-Pacific Product Placement Forecast, 2011-16 51 3.24 Europe, Middle East & Africa Product Placement Spending, 2006-11 52 3.25 France Product Placement Spending, 2006-11 53 3.26 France Product Placement Forecast, 2011-16 53 PQ Media 2012 Copying Prohibited Page 4
Data Tables & Charts Global Product Placement (cont.) 3.27 United Kingdom Product Placement Spending, 2006-11 54 3.28 United Kingdom Product Placement Forecast, 2011-16 55 3.29 Italy Product Placement Spending, 2006-11 56 3.30 Italy Product Placement Forecast, 2011-16 56 3.31 Germany Product Placement Spending, 2006-11 57 3.32 Germany Product Placement Forecast, 2011-16 58 3.33 Spain Product Placement Spending, 2006-11 58 3.34 Spain Product Placement Forecast, 2011-16 59 3.35 Russia Product Placement Spending, 2006-11 60 3.36 Russia Product Placement Forecast, 2011-16 60 3.37 Rest of Europe, Middle East & Africa Product Placement Spending, 2006-11 61 3.38 Rest of Europe, Middle East & Africa Product Placement Forecast, 2011-16 62 3.39 Total Global Product Placement Forecast by Region, 2011-16 62 PQ Media 2012 Copying Prohibited Page 5
Methodology PQ Media is the leading provider of media econometrics through a proprietary research methodology that tracks, analyzes and forecasts spending, usage and trends in all 20 major segments and more than 100 sub-segments of the media industry. PQ Medianomics is driven by data collection, algorithmic and formulaic methods synthesized with analytic approaches to determine spending, usage and trends models. PQ Medianomics, powered by our exclusive SpendTrak and UsageTrak databases, as well as our Global Opinion Leader Panel, has consistently predicted key trends, insights and outcomes that have influenced strategic plans, investment parameters and tactical approaches. Our process also layers the impact of key data and variables, such as economic, demographic, behavioral, technological and regulatory, among others. PQ Medianomics SpendTrak Database Margin of Error = +/- 3% (9 of 10 Yrs) Global Opinion Leader Panel UsageTrak Database The PQ Media Global Product Placement Forecast 2012-2016 is the leading source to define, size, structure and forecast this rapidly growing sector of the advertising and marketing industry. It provides exclusive data and analytics tracking spending and trends in U.S. and global markets on paid product placements in media. In defining, sizing, structuring and forecasting product placement, PQ Media sought the advice of our Global Opinion Leader Panel of several hundred executives at media companies, financial institutions, consulting firms, agencies and brands regarding various data and information that should or should not be included in the segments or subsegments of this industry. Additionally, PQ Media researched, surveyed and consulted with dozens of global product placement companies for input regarding size, scope, trends and growth of the product placement industry, while examining hundreds of public and private documents from more than 100 sources. PQ Media 2012 Copying Prohibited Page 6
Product Placement Definitions & Segmentation Product Placement is a marketing tactic increasingly used by advertisers as part of a multimedia campaign solution in which the general objective is to place or integrate brand names, logos or specific products within the non-ad content of various media, including television, film, internet, mobile, videogames and music. The ultimate goal of advertisers utilizing product placement is to prominently place or creatively integrate brands or products into particular story lines or scenes to promote brand awareness, favorable brand attitudes and purchase intention. Marketers occasionally work with producers to feature brands as the central focus of a scene and, in some cases, products are discussed by characters in an effort to develop a strong emotional connection with target consumers. For the purpose of this report, PQ Media analyzed only product placement arrangements in which there is a financial transaction in order for the placement to occur, such as hiring a product placement agency, paying a producer, network or publisher, and fees charged by an ad agency for negotiating placements. Included in the television spending data are premiums paid above the negotiated CPM brands typically commit to during the annual TV upfronts. Network operators that sold regular ad inventory in conjunction with in-show product placements during the 2012 upfronts did so in a manner that offered a specific number of brand integrations per episode for the 2012-13 season valued at a premium over the regular CPM for ad avails. This new practice of premium valuations for product placements is distinct from the traditional added-value integrations, in which a network guarantees an advertiser one or more in-scene placements during an episode in exchange for buying ad avails in that show. While PQ Media also tracks the total value of US product placements, including paid and non-paid placements, the exposure value of non-paid placements is not included in the spending data published in this report, as it was in prior editions. The reason for this decision was twofold: 1) an accelerated shift away from non-paid product placements to paid brand integrations during the past several years, fueled by the aforementioned secular changes driving up the value of in-media real estate; 2) PQ Media s research reports typically feature only data related to financial transactions conducted for the purpose of executing advertising and marketing solutions. In addition to the added-value integrations referenced above, the industry continues to engage in the practice of non-paid product placements, which have been executed as socalled barter arrangements, with the product serving as compensation. That is, brands receive placements in exchange for providing props or other services free or charge, such as air fare for production crews to get to location shoots and automobiles for lead characters to drive, even off the set when production is completed. However, barter arrangements are becoming less frequent as content producers seek to generate revenues to help defray costs, as traditional revenue streams, such as advertising, admissions and unit sales, remain weak. Additionally, no value is assigned to products appearing on screen or referenced in dialogue if the brand was not notified and compensation was not prearranged. PQ Media 2012 Copying Prohibited Page 7
The vast majority of paid product placements take place in two media: television and film. But there is a significant minority of placements occurring on digital platforms (online and mobile), in videogames, in music and in other media. PQ Media segments product placements by medium in this report as follows: Television placements include brands, products, services, etc., that are integrated into storylines, used by characters in scripted programming, used by contestants or judges in reality programming, used by hosts or crew on informational how-to programming, or displayed in the background of sets. Film product placements often center on a character s use of brands (i.e., driving a particular car model), as well as on-camera product displays and location-specific shots, such as a restaurant or resort. Videogame placements include advergames, which are brand-supported titles like the Lego s Star Wars series; branded console games offered at a quick service restaurant or retailer, such as Burger King; in-game placements, such as a character using a brand s product, such as a cell phone in an auto racing title; and interactive games on brand websites that incorporate their products or services. Internet & Mobile placements include various forms of digital content, such as webisodes, podcasts, applications (apps) and blogs. To avoid double-counting, it does not include paid placements viewed online or through wireless devices on sites like YouTube that were originally purchased on traditional media, such a TV program or music video paid placement. It also does not include the word-of-mouth marketing tactic, in which a celebrity or individual is paid to discuss products recently purchased. Music placements include product placements in music videos or incorporated into lyrics. A product or brand logo can be visually integrated into a music video by having the singer use the product or by displaying it in the background. A product can also be referenced in the song. The category includes paid placements negotiated between a brand and the musician, although the placement might be intentionally blurred when first released on a music cable network that restricts paid placements, as the brand s placement is more evident when the music video is replayed on a digital platform where there are no product placement restrictions. Other Media includes product placements in newspapers, magazines, consumer books, comic books and radio. Paid placements include specific mentions of a brand when a generic reference would have sufficed, such as an automobile reference in a book, a disc jockey mentioning a restaurant he visited, a comic book character using a specific type of laptop, and a magazine or newspaper photo spread accompanying an article with a person holding a specific branded product. It does not include advertorials, which are dedicated pages in a magazine or newspaper in which a number of themed articles are sponsored by brands. It also does not include custom content, in which a brand retains a specialty publisher to produce a theme-specific magazine, video or e-mail that contains ads for products produced only by that brand. PQ Media 2012 Copying Prohibited Page 8
Chapter 1 Executive Summary Global Product Placement, 2006-16 PQ Media 2012 Copying Prohibited Page 9
Key Takeaways Total spending on global product placement, including paid placements in television, film, online and mobile platforms, videogames, music, and other media, rose 9.8% to $7.39 billion in 2011. The product placement segment failed to replicate the double-digit gains posted before the Great Recession, as the euro crisis led to a weak overall ad market in Western Europe, the March 2011 tsunami devastated the advertising market in Japan, and uprisings in the nascent Middle East markets led to a shutdown of advertising in many of those markets. Strong growth before the Great Recession and accelerating growth for the past two years compensated for a decline in spending in 2009, producing a 12.6% compound annual growth rate (CAGR) in the 2006-11 period. In the US, the largest product placement market, spending increased 10.2% to $4.26 billion in 2011, driven by accelerated growth in product integrations in television and film. Solid growth during most of the 2006-11 period fueled a 12.8% CAGR gain. Television is the primary medium that brands use for product placement, rising 10.9% in 2011 to $4.76 billion, representing a 64.4% share of the paid placement market. Relaxation of TV placements in Western Europe helped spur growth. Internet and mobile platforms was the fastest-growing medium in 2011, rising 27.9% to $188 million, propelled by a rise in placements on webisodes and social media. The Americas region, with the three largest markets, represented the lion s share of spending on product placement in 2011, generating $5.84 billion in 2011, a 79% share of the market, while also registering the strongest growth, rising 10.4%. Asia-Pacific (APAC) is the second-largest global product placement region, with $811 million in 2011, but growth decelerated to 9.4% due to the impact of the Japanese tsunami on the paid placement market. The Europe, Middle East & Africa (EMEA) region continues to struggle due to the ongoing euro crisis, growing only 5.6% in 2011 to $739 million, despite new European Union (EU) regulations that allow paid product placements on television. Global product placement growth is expected to accelerate in 2012, climbing 11.7% to $8.25 billion, fueled by strong growth in product placements on TV in most countries and significant increases in product placements in digital platforms and music. In the US, product placement spending is projected to rise 11.4% in 2012 to $4.75 billion, and register an 11.2% CAGR from 2011 to 2016. Growth will be fueled by strong expansion in brand integrations on all media platforms, as marketers seek alternative methods to engage with target audiences who are shifting media consumption patterns. PQ Media 2012 Copying Prohibited Page 10
Share of Global Product Placement Spending by Region in 2011 10% 11% Americas Asia-Pacific Europe, Middle East & Africa 79% Source: PQ Media Share of Global Product Placement Spending by Medium in 2011 3% 4% 7% 1% Television Film 21% Videogames Internet & Mobile 64% Music Other Media* Source: PQ Media PQ Media 2012 Copying Prohibited Page 11