Dive Brief:

• The product placement market in the U.S. is projected to reach $10 billion in 2018, with the demand for higher-value brand integrations growing, according to MediaPost citing a new report by PQ Media.
• The value of product placements increased 13.7% to $8.78 billion in 2017 even as the total number of product placements continues to decline, per the research. The growth is being driven by brands negotiating higher-value deals to offset developments like over-the-top (OTT) services not accepting traditional advertising formats.
• Network TV will account for more than 70% of the product placement market, but OTT, including Netflix and Amazon Prime programming, is the fastest-growing segment. Live TV is also driving interest in high-value product placements. In a first for TV networks' upfront presentations, product placements were featured as part of the pitch to advertisers, PQ Media President Patrick Quinn told MediaPost. 

Dive Insight:

Marketers have been scrambling to adapt to changing TV viewing habits, as the number of cord cutters continues to increase and the popularity of streaming platforms like Netflix potentially costing advertisers between $3 billion and $6 billion in lost revenue and nearly 2 billion missed ad impressions per day, according to nScreenMedia. As the PQ Media research shows, in-programming product placement is one potential solution that marketers are exploring to deliver brand messages to these viewers.

Consumers continue to expect more authentic experiences from brands, and the ability to more seamlessly execute and integrate product placements into programming is encouraging more marketers to embrace the format. Notable examples include KFC’s appearance in Netflix’s “Stranger Things” and the integration of Tin Cup Whisky in the platform’s series “Jessica Jones,” according to the MediaPost report.

Network TV is also embracing product placements. Major retailer Target was the setting and a major part of the storyline of a March episode of “Superstore” on NBC. Scenes were filmed inside a real Target store and the episode prominently featured the company’s bull terrier mascot. The placement was part of Target’s partnership with NBC Universal to create more unique content integrations. Other integrations include Toyota Camry appearances on ABC’s “Modern Family” and the addition of Procter & Gamble in the storyline of an episode of the network’s “Black-ish.”