Report: Branded Entertainment Less Impacted by Recession

STAMFORD: Branded entertainment spending in the U.S., including product placement, fell just 1.3 percent in 2009 to reach $24.63 billion, according to PQ Media, with solid growth forecast for this year.

PQ’s branded event data includes spending on sponsorships, event marketing and paid product placement. Paid product placement in TV, film, video games and other media, was down 2.8 percent to $3.61 billion in 2009. For 2004-2009, however, spending was up by a 27.1 percent compound annual growth rate (CAGR).

The U.S. is the world’s largest branded entertainment market—accounting for 45.1 percent of spending—and the period from 2004 to 2009 recorded a 10.6 percent CAGR, PQ notes. Last year’s dip was the first decline in U.S. branded entertainment since PQ began tracking the business in 1975. However, the industry took a much smaller hit than than traditional ad market, which was down by 14.4 percent last year, according to PQ’s numbers.

“The cascade of new media platforms and technologies have led to significant changes in consumer media use, which has forced brands to rethink long-held beliefs about effective strategies to reach target audiences,” said Patrick Quinn, the CEO of PQ Media. “The availability of content through the internet, mobile devices and social networks, the difficulty of reaching more elusive target consumers, and the transformation of personal communications due to these developments have made it more important than ever for brands to invest in strategies to engage target consumers in captive locations for extended periods of time through the power of emotional connections.”

Total U.S. branded entertainment marketing spending is projected to increase 5.3 percent this year, with a 9.2 percent CAGR through 2014. Paid product placement will be the fastest growing in the 2009-2014 period.