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Exclusive PQ Media Research: Global Paid Product Placement Spending Surged 42.2% to $2.21 Billion in 2005; Double-Digit Pace Continues in 2006; Product Placement Emerges As Key Brand Marketer Strategy To Make Emotional Connection with Consumers.

STAMFORD, Conn. -- Global paid product placement spending surged 42.2% to $2.21 billion in 2005 with double-digit growth expected to continue in 2006 and beyond, as brand marketers scramble to effectively engage consumers worldwide, according to research released today by PQ Media, a custom media research firm.

Global paid product placement spending in TV, film and other media is expected to climb another 38.8% to $3.07 billion in 2006, driven by the continued shift in the world's leading markets toward a paid placement structure from a barter and added-value model, according to the PQ Media Global Product Placement Forecast 2006 (http://www.pqmedia.com/global-product-placement-2006.html). While the markets in the Americas and Asia tend to be more free-wheeling with regulations vague or nonexistent in some cases, the transition is moving slower in Europe due to stricter rules governing the use of product placement. But PQ Media's Global Opinion Leader Panel believes this will change by year-end 2007, when the European Union is expected to liberalize restrictions encumbering growth in this region, fueling significant upside in some European markets.

"Product placement has evolved from a novel marketing tactic to a key marketing strategy on a global scale, as brand marketers seek more effective methods to make important emotional connections with consumers," said Patrick Quinn, president of PQ Media. "This trend is significant in that there is a new media order emerging worldwide in which fear of ad-skipping technology, doubts about traditional advertising's effectiveness, and declining government media subsidies have fueled a dramatic increase in the value of seamless brand integration."

The US is by far the world's largest paid product placement market at $1.50 billion in 2005, up 48.7%, making the US the world's fastest growing market as well. The US market tends to be much more advanced than other countries, and it is the model to which most other countries aspire. Brazil and Australia are the next two largest markets for paid placement spending at $285.3 million and $104.3 million, respectively, in 2005, according to the PQ Media Global Product Placement Forecast 2006. On the strength of its paid film placement market, France ranks fourth, followed by Japan. PQ Media's report also reveals that product placement methods vary widely by country, with processes driven by varying cultures and regulatory climates. The majority of spending in the US and abroad is derived from five key product categories: transportation & parts, apparel & accessories, food & beverage, travel & leisure, and media & entertainment.

Although the share of barter and added-value arrangements is declining, these types of non-paid placements are still used often throughout the world. To determine the value of non-paid placements, PQ Media used the iTVX Q-Ratio, the world's most widely used and respected product placement valuation tool. The overall value of the global product placement market, including the barter/exposure value of non-paid placements, grew 27.9% to $5.99 billion in 2005, and is projected to expand another 24.3% to $7.45 billion in 2006, according to the PQ Media Global Product Placement Forecast 2006.

PQ Media forecasts that global paid product placement spending will grow at a compound annual rate of 27.9% in the 2005-2010 period to $7.55 billion, as product placement growth continues to significantly outpace that of traditional advertising and marketing. The overall value of the worldwide product placement market, including the barter/exposure value of non-paid placements, will increase 18.4% compounded annually to $13.96 billion in 2010.

Methodology

PQ Media's global spending and forecasting methodology is a proprietary combination of its Global Opinion Leader Panel, which includes more than 50 of the world's leading authorities in product placement; the firm's proprietary SpendTrack database, the largest advertising and marketing spending database in the world; exclusive econometric modeling from PQ Media's analysts, recognized as the global leaders in competitive media intelligence; and the iTVX Q-Ratio.

The PQ Media Global Product Placement Forecast 2006 includes exclusive historical and forecast data for the 2000-2010 period, including actuals from 2005 and estimates for 2006. The report is more than 150 pages, including 148 tables and charts, with data, analysis and forecasts covering the world's 15 largest product placement markets by country and by region. In addition, subscribers will receive access to continually updated video examples of product placements worldwide, as well as PQ Media's Product Placement Cost Index.

A free executive summary of the PQ Media Global Product Placement Forecast 2006 is available for download at http://www.pqmedia.com/global-product-placement-2006.html. PQ Media is the world's leading research and consulting firm specializing in the fundamental transformations taking place globally in consumer and b2b media. PQ Media provides brand marketers, media buyers, media companies and financial institutions with alternative media research through its custom and syndicated practices, in addition to covering traditional media markets and trends. PQ Media is located at Two Stamford Landing, Suite 100, Stamford, CT 06902 and can be reached by phone: 203-921-0368; fax: 203-921-0367; email: info@pqmedia.com; or website: www.pqmedia.com.
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