A new survey from PQ Media research shows that content marketing is exploding. The new in-depth KPI benchmark series finds global content marketing revenues were up 13.3 percent in 2014 to $26.47 billion. Specifically, content marketing aimed at businesses reached $13.96 billion in 2014, a 52.7% share of the sector. Meanwhile, hybrid print & digital content marketing channels reached $14.09 billion propelled by the largest of the 13 channels PQ Media tracked: Branded print and digital magazines and advertorials at $8.13 billion.
This follows PQ Media’s earlier findings that product placement was up 13.6% in 2014, accounting for a $10.58 billion slice of the branded entertainment market. To get a deeper dive into the topic of product placement research, we got an extensive look into the subject with Leo Kivijarv, PQ Media’s Executive VP and Research Director, about what’s driving growth in product placement, and if Jurassic World drove that growth off a cliff? Plus, are the sponsored quiz shows of the 1950s about to make a comeback?
brandchannel: Jurassic World is the monster hit of the summer and everyone is talking about it. Yet they’re also talking about product placement in less than favorable terms. Are we suffering from too much product placement?
Leo Kivijarv: Not really. For example, James Bond films have been notorious for product placements, particularly The Man with the Golden Gun, Tomorrow Never Dies, and Die Another Day, in which complaints were made for the type of product placement (Bond driving an AMC in MwGG), the cost of the deal (over $100 million to have Ford products driven in TND), or the number of placements (reportedly eight in Die Another Day).
Audiences still crave Bond films regardless of the product placements and critics praise or pan films based on the quality of the plot and/or villains. However, Bond producers took notice of the critic’s complaints and became smarter in limiting the number of placements per film, thus making each placement more expensive to do, and thus treated as a premium.
bc: You predict a 13 percent growth in product placement in 2015 (after a nearly 13 percent bump in 2014). What’s driving that?
LK: Part of the answer is related to the previous question – anticipated CPMs for product placement deals are rising because producers are becoming more selective in which placements they accept. Conversely, brands are also becoming more intelligent about the product placement process, particularly those brands that have started branded entertainment division or forged a partnership with producers.
Although the quantity of the products placements are falling, the quality is rising. Relatively inexpensive brand cameos, in which the product is placed in the background, are rarely being used. Rather, product integrations into plot lines have become mandatory. The most sophisticated brands are asking for specific placements within the script that coincides with an upcoming advertisement of the product, or being highlighted throughout the program, such as an Apple iPad being used to shoot almost the entire episode of Modern Family.
bc: And beyond traditional TV?
LK: There is also the rise of product placement on over-the-top (OTT) video services, such as Netflix and Amazon Fire. House of Cards, for instances, has multiple product placement arrangements.
Additionally, product placement is growing most rapidly on media platforms favored by the younger demos – digital, music and videogames. To be clear, digital placements are those specific to content developed for the internet and mobile, not placements on TV shows and films that are viewed on computers and wireless devices (unless done virtually like a vending machine getting a Pepsi logo in the online download of The Terminator).
For example, if there are multiple product placements on a YouTube Multi-Channel Network (MCN), those figures would be included in digital product placements, whereas if the brand produced the MCN, it would have exclusivity and thus be considered content marketing. Music placements are being driven by consumers viewing music videos on digital devices. MTV had a policy in which videos couldn’t have sponsors, whereas YouTube had no such policy. Videogame placements saw accelerated growth in 2014 after the release of the Xbox One and PlayStation4 in late 2013, with numerous new titles published the following year that include product placements.
bc: How do you come up with your numbers on that growth?
LK: PQ Media’s proven research methodology and proprietary mapping system – PQ Medianomics™ – utilizes proprietary data collection techniques, algorithmic models and analytical approaches to track, analyze and forecast spending, consumption and trends in all major media, platforms and channels of the media and entertainment industries. PQ Media’s system, driven by our SpendTrak™ and UsageTrak™ databases, as well as our exclusive Global Opinion Leader Panel™ (GOLP), layers the impact of key data and variables.
In defining, structuring, sizing and forecasting global industries and markets, such as product placement, PQ Media seeks input from our exclusive Global Opinion Leader Panel™, which includes several hundred executives at media and entertainment companies, financial institutions, consulting firms, media agencies and brands regarding various data and information driving key trends and growth in campaign media spending. We also examine thousands of public and private documents from more than 1,000 sources pertaining to regional and market-specific trends and data in content marketing, the advertising and marketing ecosystem; economic sectors and demographic profiles; and any other factors, such as technology penetration rates, that might affect the content marketing industry, overall advertising environment, the economy and consumer media usage behavior and spending patterns.
bc: Where area do you see product placement evolving into where it isn’t yet mainstream?
LK: There has always been a church-and-state relationship between print media and brands. For example, the Association of Newspaper Editors has ethical guidelines that forbid sponsored stories unless there are clear indications that the content was sponsored, such as home and garden inserts in the spring. The magazine industry had similar guidelines, with advertorials often serving as the acceptable method.
With the annual decline of print media advertising since the Great Recessions, editors and publishers are allowing those guidelines to be loosened. In most instances, the sponsored stories fall under content marketing under the moniker, “native advertising,” as these brands have exclusive rights and are the only brand mentioned in the story (e.g., Ford vehicles in a story about back-up cameras). However, there are instances where editors are allowing multiple brand mentions, particularly in posts by freelancers who are allowed to supplement their meager income with product placement deals. [Kivijarv would not reveal any names, saying the case was communicated in the strictest confidence. – ed]
The other new avenue, believe it or not, might be television. Due to the quiz show scandals of the 1950s, brands were no longer allowed to produce programs. Sometime in the future there will probably be a broadcast or cable network that complains it can’t afford to produce its own programs to compete with the sponsored programs on OTT services. There might come a time when the Federal Communication Commission reverses the regulation that has been on the books for almost 60 years.