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Product Placement, Including Barter Arrangements, Reached All Time High Last Year

A recent survey by PQ Media of Stamford (CT) shows that paid product placements in movies and TV shows soared 44% to $1 billion last year. Spending on television placements skyrocketed 84%, outpacing film for the first time in 30 years.

The total value of the product placement market, including barter and gratis arrangements, grew 31% to an all-time high of $3.5 billion in 2004. It is expected to expand another 23% this year to hit $4.2 billion.

The growth in product placement is coming, according to the study, at the expense of the advertising markets. Advertising and marketing expenditures were up just 7% last year, despite increased spending on political ads in an election year.

The study found that paid placements constituted just 29% of the overall value of the market last year, with barter agreements and gratis placements accounting for the lion’s share of the market value.

More than half of the product placement spending is found in four of 10 marketing categories: transportation and parts, apparel and accessories, food and beverage, and travel and leisure.

Editor’s Note: According to Arbitron and Edison Media Research, 29% of people who record a TV show do so to skip or fast-forward through the commercials, and 52% record shows to watch them when it fits their schedule. The other 19% record shows for both the time-shifting and the skipping capabilities.

Another company, MediaCheck, is recruiting about 5,000 households in Omaha to use devices that will record when an ad is watched in full. (The machines, which pick up a coded signal embedded into the TV commercials of participating advertisers, will give marketers detailed information such as how many times their ads were skipped or time-shifted and how long viewers watched the commercials.)

For every ad they watch, viewers will earn points that can be used to redeem rewards via the Internet.