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Global Market Growth of Product Placement

Global paid product placement spending surged 42.2 percent 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 by PQ Media.

Global paid product placement spending in TV, film and other media is expected to climb another 38.8 percent 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.

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.

The U.S. is by far the world�s largest paid product placement market at $1.50 billion in 2005, up 48.7 percent, making the U.S. the world�s fastest growing market as well. The U.S. 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.

On the strength of its paid film placement market, France ranks fourth, followed by Japan. The 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 U.S. 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 percent to $5.99 billion in 2005, and is projected to expand another 24.3 percent to $7.45 billion in 2006.

PQ Media forecasts that global paid product placement spending will grow at a compound annual rate of 27.9 percent 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 percent compounded annually to $13.96 billion in 2010.

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