Product Placement Still Going Strong

Although one might think marketers have forgotten about the tried-and-true product placement with all the talk about new digital platforms for video, a recent survey says it is still a healthy business.

In a new edition of its annual survey, PQ Media reports product placement growing worldwide at 37% in 2006 to $3.36 billion, and is forecasting a slowdown of growth at 30% in 2007 to $4.38 billion.

The growth of the non-paid part of the product-placement business will cool, too. This is the biggest part of the industry, including barter and other valued-added deals. According to the survey, it's estimated to be just 12.5% in 2007, registering a value of $4.95 billion. By comparison, the value was $4.4 billion in 2006.

Still, the survey says product placement continues to be robust and will have a strong future. One reason: European growth has been fueled by the relaxation of rules governing placements through a "Television without Frontiers" initiative, largely affecting the U.K., Spain and Italy.

The U.S. continues to be the dominant country for paid-product placement—representing more than 66% of the worldwide business. Next year, PQ projects the U.S. will pull in $2.90 billion.

Countries that will follow the U.S. in terms of size include Brazil, Mexico, Australia and Japan. China will be the world's fastest-growing country, projected to grow by 34.5%. The next big increases will come from the U.S., Italy, India and Canada.

TV is still the biggest medium to place products, accounting for almost three-quarters of the entire business. By contrast, product placements in film are less than half that of TV, with movies pulling $885.1 million in 2006.