try
sed -i '/PLACEHOLDER/ r TestOutput.txt' SQLInput.txt
where
-i
edit in place/PLACEHOLDER/
search for patternr TestOutput.txt
read file
note that /PLACEHOLDER/
is not deleted.
to have it deleted
sed -i -e '/PLACEHOLDER/ r TestOutput.txt' -e s/PLACEHOLDER/d/ SQLInput.txt
where
-e /PLACEHOLDER/d
will delete entire line with PLACEHOLDER-e s/PLACEHOLDER//
will delete PLACEHOLDER string