February 12th, 2008

Branded Entertainment Momentum Healthy: Report

By Richard Tedesco

Branded entertainment marketing grew 14.7% to an all-time peak of $22.3 billion in 2007 and is expected to grow by 13.9% to $25.41 billion this year, according to a report from PQ Media.

Spending on event sponsorship, the biggest single segment of branded entertainment, rose to $19.18 billion in 2007, representing a growth rate of 12.2%, PQ reported. Paid product placement spending ballooned by 33.7% to $2.9 billion over the past year, representing a compound annual growth rate of 40.8% between 2002 and 2007.

Growth of DVR penetration and skepticism about the effectiveness of 30-second TV spots has fueled the movement toward product placement, according to Patrick Quinn, president and CEO of PQ Media.

Advergaming and Webisodes drew $217 million in marketing dollars, for a 34.8% annual increase.

“You have a youth market that’s grown entirely with alternative marketing techniques and aren’t spending as much time with traditional media in the home as they would have 20 to 30 years ago,” Quinn said.

PQ Media anticipates more modest growth in all branded entertainment segments in 2008. Event marketing is projected to hit $9 billion, aided by presidential campaign events. Product placement, focused primarily on reality programming, is expected to reach $3.5 billion, for a 25% increase.

Growth in spending on Webisodes is expected to proceed at a pace of 46% as marketers aim for those elusive 18-to-34-year-old Gen Xers and Yers.

“That’s the sweet spot where you want to create loyalty many years out there,” Quinn said. “That’s where the heat is.”

PQ Media foresees double-digit growth in spending on branded entertainment marketing through 2012, with the sector expanding by 12.8% CAGR between 2007 and 2012, topping $40 billion by the end of that five-year span.


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