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Bump in magazine
product placement
Actually a surge, up almost 18 percent last year
By Kevin Downey
Product placement has become a big deal
on television with the rise of ad-skipping digital video recorders.
But it's also popping up in places where you would not expect it:
magazines.
The problem is that readers of magazines, while lacking the
new ad-skipping technology, are well-practiced at flipping past ads
using their hands, and that's hardly new.
What is new is that top advertisers like American Express,
Ford and many others are latching onto product placement within
editorial content as a way to get the attention of consumers.
“It’s also an additional revenue stream. Magazines are
looking at other ways of generating dollars,” says
Patrick Quinn, president of PQ Media of Stamford, Conn.
The market research company
yesterday released estimates and forecasts for the value of product
placement in media other than TV and movies, in what Quinn says is
the first study of its kind. It conducted the study by speaking with
magazine publishers and ad agencies and by evaluating various
financial statements, public and private.
How do you put a price on product placement in a
magazine?
PQ Media calculates the value based on a number of
factors, beginning with the dollar amount advertisers would pay to
get comparable time and space with traditional ads. It then adjusts
that amount based on measures such as the image quality and size
within the overall content.
All product placements in 2004 were valued at $3.46 billion,
with TV and movies accounting for nearly 91 percent of that sum. Of
the remaining $325.8 million, magazines
accounted for 42 percent, or $137 million.
PQ Media estimates magazine placements grew 17.7 percent in
the last year alone and that it will grow another 17.5 percent this
year. It will then average 12.4 percent each year through 2009,
reaching $246 million.
“There is some resistance to product placement
because there’s a separation of church and state,” says Quinn,
referring to editorial and ad sales teams at magazines. “As those
walls break down a bit and publishers become more receptive to
creative ways of doing product placement or packaging it with other
advertising then we’ll see more of this going forward.”
Most magazine product placements are made through barter
deals, where magazines get something other than cash from
advertisers, such as listings where specific products can be
purchased. But more are paying for such placements.
PQ Media estimates that 82 percent of magazine product
placements last year were placed through barter deals. However, paid
product placements grew 28.3 percent, compared to 19.4 percent for
barter placements.
Leo Kivijarv, vice president and research director of PQ
Media, says many product placements are offered to companies by
magazines as a bonus for advertising in the publication.
“That is an offshoot of what has been happening in the
television industry,” he says. “That is slowly evolving into the
magazine industry.”
In any case, the pace of placement far exceeds that of
traditional display advertising. First-quarter ad spending in consumer
magazines grew 9.5 percent over the previous-year period, to $4.7
billion, according to TNS Media Intelligence. Spending in
business-to-business magazine was flat at $1.2 billion.
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July 28, 2005
©
2005
Media Life
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Kevin Downey is a staff writer for Media Life.
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