In a 2010 interview with FaceCulture, Marina said the song was about "being a fake" and "it was probably connected to me being a trying to be a fake for two years, , then moving onto what I really was which was myself".
Plastic Rainbow was first mentioned in comments on July 5, 2006 along with Troubled Mind and This is LA. The song was originally produced in 2006 along with This is LA, Philosopher My Arse, Troubled Mind and Like China Dolls by an unknown producer found by Marina off Craigslist. Marina didn't like the "prog-rock" sound of their production, so she decided to produce her own music instead. The 2007 version of the song, which appears on Mermaid vs. Sailor was produced by Marina herself.
In a 2015 interview with Rolling Stone, Diamandis revealed that Plastic Rainbow was the first song she'd ever written at around the age of 19 or 20. She described the song's lyrics as "lame," but that writing the song gave her a feeling she'd never had before, leading her to want to become a songwriter.
On March 17, 2020, the 2006 demo of the song leaked online.
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