August 17, 2006

Product placement ad value to triple by 2010: study

NEW YORK -- Advertising embedded in television or movie plots will more than triple by 2010 as technologies that let viewers skip commercials become more prevalent, according to a study released on Wednesday.

Paid "product placement" across all kinds of media, from TV to novels, surged nearly 39 percent in 2005 to $2.21 billion worldwide, and that figure was expected to grow to nearly $7.6 billion in 2010, the study by research firm PQ Media said.

Consumer watchdog groups lament the growth of product placement, in which a brand name will literally be written into a story line or a product will feature prominently in a scene, because it blurs boundaries between entertainment and advertising.

But despite suggestions that consumers will grow weary of blatant product references in their entertainment, advertisers are spending more on the tactic as devices like digital video recorders enable viewers to skip traditional TV ads.

Consumers also are spending more of their media time with commercial-free devices like the iPod music player or Internet video.

The United States leads global media markets in paid ad placements, which were worth $1.5 billion in 2005, PQ Media said. The lion's share of that was in TV programs and movies, but nearly $58 million was spent inserting products into media such as video games, song lyrics, books and newspapers.

Brazil and Australia are the next-largest markets for product placement due to fewer regulatory controls, with $285 million and $104 million spent, respectively, the study said.