Branded-Entertainment Market Hit $22.3 Billion in 2007

STAMFORD, February 13:
According to alternative media research firm PQ Media, spending on
branded-entertainment marketing grew 14.7 percent to a high of $22.3 billion in
2007, and is projected to expand another 13.9 percent in 2008 to $25.41
billion.

The report, titled PQ
Media Branded Entertainment Marketing Forecast: 2008-2012, found that branded-entertainment marketing
represented approximately 8 cents of every marketing services dollar spent in
2007. PQ Media predicts that branded entertainment will grow at a double-digit
pace in 2008, driven by nearly $9 billion in event marketing spend; product
placement spending, particularly on reality programming, of $3.5 billion, up
nearly 25 percent; and a 46-percent growth in webisodes, as major networks
begin to produce full-length online episodes in an effort to tap into the youth
market.

While remaining strong,
branded-entertainment spending growth is projected to decelerate slightly in
2009 due to slower economic growth, maturing markets and the absence of
cyclical spending infusions, such as political campaigns. The
branded-entertainment marketing sector is projected to grow at a 12.8-percent
compound annual growth rate (CAGR) from 2007 to 2012, exceeding $40 billion.

Branded-entertainment
marketing includes three major segments: event sponsorship and marketing;
product placement; and advergaming and webisodes. Spending on event sponsorship
and marketing, the largest segment of branded entertainment, rose 12.2 percent
to $19.18 billion in 2007. Event sponsorship and event marketing attracted new
customers by using face-to-face engagement, which is lacking in many
traditional advertising and marketing strategies; paid product-placement
spending grew 33.7 percent to $2.9 billion in 2007, at a CAGR of 40.8 percent
from 2002 to 2007.

“Higher DVR penetration
combined with increased TV program product integration helped drive paid
product-placement spending,” noted Patrick Quinn, the president and CEO of PQ
Media.

Spending on advergaming
and webisodes increased 34.8 percent to $217 million in 2007, fueled by efforts
among marketers to reach the 18- to 34-year-old demographic, which is watching
less television and spending more time on the Internet playing video games and
downloading videos. Advergaming and webisodes, while the smallest
branded-entertainment segment, is the fastest growing, climbing at a
51.7-percent CAGR from 2002 to 2007.

Added Quinn, “Even without
an economic slowdown, there are strong secular trends driving investment from
traditional advertising media to alternative marketing strategies. Americans
are spending more time outside their homes, online at work, communicating via
wireless devices and multitasking with various media, which has created a
generation of elusive consumers for brand marketers to try to reach. And these
trends have led to increased investment in alternative marketing tactics.”

—By Irene Lew