Global Product Placement Spend To Record 14.3% Growth In 2022
Product placement spending worldwide is on pace to grow at an accelerated 14.3% to $26.2 billion in 2022.
This is nearly doubling in size since 2016 as brand integration opportunities have greatly expanded across multiple media platforms and channels, according to PQ Media’s Global Product Placement Forecast 2022-2026.
Global product placement spending surged 12.3% to $22.93 billion in 2021, following the worst decline ever in pandemic-struck 2020, fueled by double-digit growth in all six media platforms, led by various digital media, television and video segments, and several recorded music channels, according to new research released today by PQ Media.
While the overall television platform still commands the lion’s share of product placement spending globally at 70% and total filmed entertainment remains the second-largest platform worldwide, various digital media and recorded music channels are driving even faster growth of these two overall media platforms, including social media & blogs, influencer sites, virtual placements, music videos & lyrics, and podcasts.
In the United States, which accounts for 56% of the global market, product placement spending bounced back 13.2% to $12.84 billion in 2021, after the worst decline ever in 2020, driven up by the increased value of brand integrations across all six platforms that grew at double-digit rates, with digital media growing the fastest at 18%, followed by recorded music (15.8%) and television (15.7%).
Although the pandemic lockdowns limited new brand integration deals in 2020, significant opportunities emerged later in the year amid the stay-at-home environment, as studios scrambled for new sources of revenue and brands hustled to gain more visibility among youth audiences. While the pandemic-fueled arc for streaming video services peaked in mid-2021, the pent-up production and completion of new TV series and movies emerged in the first half of 2022, which brought long-awaited new content and showed which services would lead the charge in the post-pandemic environment.
Accordingly, new seasons and final episodes of a slew of streaming TV series that had been delayed during the peak of COVID-19 either debuted or ended in 2022, including “Ozark,” “Stranger Things,” “Better Call Saul,” “Peaky Blinders,” “Reacher,” and “The Morning Show,” on leading video streamers like Netflix, Amazon Prime, and Apple TV+. Accordingly, global product placement spending is pacing for accelerated double-digit growth in 2022, as the the value of brand integrations is expected to rise 14.3% on secular media and consumer trends favoring branded entertainment and major brands increasing their use of product placement in media to engage pre-Boomer audiences, according to the Global Product Placement Forecast 2022-2026.
The US is the chief catalyst of the surge in product integration spending in 2022, as the value of product placements in all US media is projected to jump 15.1% to $14.77 billion, fueled by the growing number and value of product placements targeting more mobile and diverse younger consumers via not only streaming TV and films, but also the various aforementioned digital media and recorded music channels.
While the retrenchment of the US and global product placement markets in 2020 was the steepest decline recorded in the 47 years PQ Media has been tracking product placement, it marked only the second time that brand integration spending declined since 1975. And there are compelling reasons why this below-the-line marketing tactic has posted such an enviable track record over five decades.
“Our research indicates that skillful product placement creates emotional connections with key target consumers brands are trying to reach, particularly pre-Boomer demographics, which are more elusive, tech-savvy and averse to traditional media,” said PQ Media President & CEO Patrick Quinn. “Paid placements have grown substantially in number and value during the past several decades because brands have become more willing to invest in the creative integration of their logos and products in storylines that expose their assets in meaningful ways. And the strong desire to gain brand awareness among target consumers, create positive brand associations and generate sales lift will continue to favor product placement in the post-pandemic era.”
While leading subscription video streamers don’t sell traditional ad spots on their respective services, the number of product placements in their content offerings has soared in recent years. Despite the short-term challenge of the pandemic, plot integrations have become more common and the number of original broadcast, cable and streaming TV programs has expanded greatly, reaching 559 in 2022, more than double the number of shows in 2011.
Product placement in TV is, by far, the largest media platform category, valued at $16.06 billion globally in 2021, according to the Global Product Placement Forecast 2022-2026. The hottest streaming TV series are driving the double-digit growth in product placement in the overall TV category, such as the 140 products placed in “Stranger Things” on Netflix, including Skittles, Sony, Reebok, and Eggo, which reported a 14% increase in sales after its brand integration appeared. It is estimated that all product integrations in “Stranger Things” netted producers at least $25 million.
Some streaming TV shows added QR codes on screen to purchase integrated products, such as Peacock’s “Love Island,” while Roku jumped into the fray in 2022 by taking part in the annual TV Upfronts for the first time, offering value-added sponsorships and product placements in upcoming scripted and reality programs for the 2022-2023 season. On a more adverse note, Peloton received negative publicity and its stock took a beating on Wall Street after its product placements in HBO Max’s “And Just Like That” and Showtime’s “Billions” featured lead characters suffering heart attacks while exercising on Peloton machines.
Product placements in films, the second largest platform category worldwide, generated $2.77 billion, but posted the lowest growth at 5.9% after cratering 14% in 2020, as theatrical films continue to make a slow comeback from the devastating impact of COVID-19 on the entire business in 2020. For example, the theatrical film industry has yet to equal pre-pandemic production levels, as the number of films released in the US in 2021 was only 438, compared to 910 in 2019.
Driving filmed entertainment’s growth is streaming movies, which featured multiple new films that generated the highest product placement values ever by theatrical or streaming films in 2021, led by “Don’t Look Up” on Netflix, which garnered more than $275 million in product placement value, followed by four other streaming movies that produced over $150 million in product integration value.
Product placement in music was the smallest channel at $302 million in 2021, but was the second-fastest growing, up 13.9%, as brands have ratcheted up product integrations in music videos and lyrics, according to PQ Media. For example, in July 2022, Beyoncé switched out her Birkin for Telfar in her new album’s lyrics, sending searches for the affordable US luxury brand soaring. The album became Spotify’s most-streamed album in a single day by a female artist in 2022.
Product placements in digital media grew the fastest, up 16.3% to $1.97 billion in 2021, fueled by online influencer, social media and virtual placement deals. Among these were Healthy Hippo Naturals, a plant-based low sugar candy, that appeared on Kourtney Kardashian’s “Poosh” blog, while Amazon and Peacock unveiled new virtual placement technologies and Mirriad partnered with TelevisaUnivision to insert virtual placements in popular telenovelas.