Product placement, or embedded marketing, is a type of advertising, in which promotional advertisements are placed by marketers using real commercial products and services in media, where the presence of a particular brand is the result of an economic exchange. The most common form is movie and television placements and more recently computer and video games. Web publishers are also experimenting with in-site product placement as a revenue model.
According to research conducted by PQ Media, global paid product placement market size was $3.36 billion in 2006, and $4.38 billion in 2007. While the United States remains the largest global market for product placement, accounting for two-thirds of spending, growth is expected to decelerate over the next four years, although remaining in the double-digits. Meanwhile, growth in the European and Asian placement markets is expected to accelerate going forward, as legal restraints are loosened and global brand marketers move to capitalize on emerging opportunities in these regions, claims PQ Media. Countries with significant market opportunities include The United States, Brazil, Mexico, Australia, Japan, China, the EU, India and Canada.
However, despite the global phenomena, the UK seems determined to buck the trend, when Culture Secretary Andy Burnham declared that the UK Government would not accept the EU Directive allowing product placement on TV. The Government’s surprise opposition to product placement represents a lost opportunity for UK broadcasters, particularly for ITV. Ofcom estimates that product placement would contribute £25m a year to UK broadcasters. However, some media buyers suggest that this number could be significantly higher. Assuming a similar growth rate to the US product placement market, the estimated benefit to UK broadcasters could rise to as high as £150m in 3-4 years. Growth in the market has been driven by the increasing use of personal video recorders (PVRs), which has encouraged the use of ad skipping between advertising breaks.
According to research conducted by PQ Media, global paid product placement market size was $3.36 billion in 2006, and $4.38 billion in 2007. While the United States remains the largest global market for product placement, accounting for two-thirds of spending, growth is expected to decelerate over the next four years, although remaining in the double-digits. Meanwhile, growth in the European and Asian placement markets is expected to accelerate going forward, as legal restraints are loosened and global brand marketers move to capitalize on emerging opportunities in these regions, claims PQ Media. Countries with significant market opportunities include The United States, Brazil, Mexico, Australia, Japan, China, the EU, India and Canada.
However, despite the global phenomena, the UK seems determined to buck the trend, when Culture Secretary Andy Burnham declared that the UK Government would not accept the EU Directive allowing product placement on TV. The Government’s surprise opposition to product placement represents a lost opportunity for UK broadcasters, particularly for ITV. Ofcom estimates that product placement would contribute £25m a year to UK broadcasters. However, some media buyers suggest that this number could be significantly higher. Assuming a similar growth rate to the US product placement market, the estimated benefit to UK broadcasters could rise to as high as £150m in 3-4 years. Growth in the market has been driven by the increasing use of personal video recorders (PVRs), which has encouraged the use of ad skipping between advertising breaks.
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