NEW YORK Branded entertainment is projected to grow 14 percent in 2008 to $25.4 billion despite the sluggish overall economy, according to new research by PQ Media.
The firm's "Branded Entertainment Marketing Forecast: 2008-2012" projects a strong shift away from traditional advertising to alternative strategies as companies seek to engage consumers through multiple platforms including television, online and mobile.
Through 2012, branded entertainment is poised for double-digit gains, PQ said. The category is projected to grow at a compound annual rate of 12.8 percent over the next five years, ultimately surpassing $40 billion.
PQ defines branded entertainment as "marketing strategies that integrate products into entertainment venues that typically provide high engagement and interactivity." The alternative media research provider focuses on three cateorgies: event sponsorship and marketing; product placement; and advergaming and Webisodes.
Based on those parameters, PQ found that branded entertainment marketing represented approximately 8 cents of every marketing-services dollar spent in 2007. And, despite the shift to new-media venues, TV and film still dominate. "Longer form branded entertainment [product placement] is [still] where the money is," said PQ CEO Patrick Quinn.
Among PQ's other key findings:
-- Branded-content spending grew about 14.5 percent in 2007 to a record high of $22.3 billion.
-- Spending on events (the largest segment of branded entertainment) rose 12.2 percent to $19.2 billion in 2007.
-- Paid product-placement spending grew almost 34 percent to $2.9 billion in 2007. "Higher DVR penetration combined with increased TV program product integration helped drive paid product-placement spending," said Quinn.
-- Spending on advergames and Webisodes increased nearly 35 percent to $217 million last year.
-- In 2008, though events and traditional media will still receive the lion's share of spending, Webisodes will enjoy the highest growth rate -- 45 percent -- as the networks seek to produce full-length online programming to capture the youth demographic.
To reach its conclusions, PQ surveyed nearly 1,000 branded entertainment and related companies for input regarding the size, scope, trends and growth of the sector.