Mondelez International, the giant international food company formerly known as Kraft, has signed a huge upfront global advertising deal with Google that will see it commit to spending millions of dollars with the search giant on online video.
Mondelez, which owns brands such as Oreo, Cadbury and Trident, would not reveal the exact size of the multi-year global agreement, but a spokeswoman confirmed it is the company’s biggest digital media deal ever.
That means it outstrips the size of the then-major (and perhaps still pretty major) global media deal the confectionery company formed with Facebook in March.
The Google deal forms part of Mondelez’s ambitious commitment to spend 10% of its total advertising budget on online video this year. That’s a big bet considering most packaged goods brands spend the majority of their budgets on TV and the fact that online video is still an emerging advertising medium.
The sheer scale of this deal — and Mondelez’s other previously stated aim to plug half of its media budget into digital advertising by 2016 after claiming it drives “twice” the return of traditional TV advertising — will surely be striking fear directly to the hearts of broadcasters, who may be worrying which other huge brands will follow the candy maker’s lead online.
That’s compounded by a recent forecast from researchers at eMarketer who predicted online video ad spend will overtake the amount spent on TV advertising by 2018.
Mondelez already has its video content sorted.
In addition to the advertising deal, Mondelez is joining YouTube’s brand partner program to create “high-quality”, “low-cost” video content for its Sour Patch Kids brand in the US. The videos will feature “influential digital stars” as the company looks to tap into already-existing and highly-engaged audiences to build their affinity with the brand.
Mondelez tells Business Insider the videos will be similar to the “Blink Studios” platform it established in April, which works as a kind of mission control for the company to “newsjack” topical issues and quickly create branded videos across a range of its brands.
The company will be hoping the switch from more traditional media to digital will improve its media efficiency. The company’s financial performance in the year to date has been mixed, after its decision to raise the prices of its products weakened its market share and forced it to trim its sales growth forecast for the full year.
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