Branded Entertainment Growth Will Defy Recession, Says Report

15 February 2008

STAMFORD, Connecticut: Although the arctic nip of recession is slowing growth across much of the US media industry, branded entertainment – event sponsorship and marketing, paid product placements, advergaming and webisodes – looks set to enjoy robust growth through 2008 and beyond. 

The prediction is based on record spend during 2007 in the branded entertainment marketing sector, which grew 14.7% to $22.3 billion (€15.3bn; £11.37bn).

Moreover, the genre has almost doubled in size over the last five years, as brand marketers continue to shift budgets from traditional advertising to alternative marketing strategies.

The trend is highlighted in Media Branded Entertainment Marketing Forecast: 2008-2012, a report released this week by PQ Media, a provider of alternative media econometrics.

Branded entertainment marketing (BEM) is projected to expand another 13.9% in 2008 to $25.41 billion, due mainly to brand marketers' quest for strategies and media that engage youth and other influential demographics.

Other growth drivers are BEM's capability to deliver return-on-investment metrics and record political campaign spending on alternative media in this contentious election year.

Says PQ Media president/ceo Patrick Quinn: "Even without an economic slowdown, there are strong secular trends driving investment from traditional advertising media to alternative marketing strategies."

"Americans are spending more time outside their homes, online at work, communicating via wireless devices and multitasking with various media, which has created a generation of elusive consumers for brand marketers to try to reach. And these trends have led to increased investment in alternative marketing tactics." 
Branded entertainment marketing includes three major segments: event sponsorship and marketing; product placement; and advergaming and webisodes.

No longer confined just to TV and film, BEM  represented approximately 8 cents of every marketing services dollar spent in 2007, according to the report.

Key trends impacting each segment of branded entertainment include:

  • Spending on event sponsorship and marketing, the largest segment of branded entertainment, rose 12.2% to $19.18 billion in 2007, as companies invested in marketing campaigns designed to create powerful and lasting brand impressions and experiences among consumers.
  • Event sponsorship and event marketing attract new customers by using face-to-face engagement, which is lacking in many traditional advertising and marketing strategies.
  • Paid product placement spending grew 33.7% to $2.90 billion in 2007, and at a compound annual growth rate (CAGR) of 40.8% from 2002 to 2007. Higher DVR penetration combined with increased TV program product integration helped drive paid product placement spending.

  • Spending on advergaming and webisodes increased 34.8% to $217.0 million in 2007, fueled by efforts among marketers to reach the elusive 18- to 34-year-old demographic, which is watching less television and spending more time on the internet playing videogames and downloading videos.
  • Advergaming and webisodes, while the smallest branded entertainment segment, is the fastest growing, climbing at a 51.7% CAGR from 2002 to 2007.
  • While remaining strong, BEM spending growth is projected to slow slightly in 2009 reflecting decelerating economic growth, maturing markets and the absence of cyclical spending infusions, such as political campaigns.
  • BEM is expected to grow at a double-digit pace in 2008, driven by nearly $9 billion in event marketing spend, robust product placement spending (particularly on reality pr

    Data sourced from multiple sources; additional content by WARC staff