Yahoo and WPP ad agency Group M today announced a plan to co-produce branded content, CNBC reports. Watch:
Branded content is content made specifically for an advertiser – in the case of this announcement video content. Typically in the case of video the content is produced as 5-10 minute “webisodes” and usually feature storylines around a specific product (a show about someone driving cross country in a Toyota Hybrid, sponsored by Toyota, for example) with plenty of product placement.
Under this deal GroupM will create the content while Yahoo will provide the distribution. In some cases this will involve creating micro-sites for the webisodes (see TBI Research for more on these “owned platforms.”). There are a couple advantages to branded content versus the average online ad campaign, specifically:
- The show is sold to the sponsor in advance of creating the webisodes so there is no risk of losing money on production (as opposed to most online shows, which are created then sold to a sponsor).
- These are not sold on a CPM basis, and the effective CPMs backed into tend to be much higher than average online inventory.
This is obviously good news for Group M since Yahoo’s massive reach pretty much guarantees audience for these shows, which is the biggest challenge to selling branded content (advertisers take a leap of faith they will reach a lot of people). As a result, Group M will likely get a lot of interest from agencies.
More importantly, this illustrates Yahoo is serious about becoming the go-to premium branding platform. Initiatives like branded content are among the most premium type of online ad campaigns, but are still a pretty small, niche buy at this stage. It should be interesting if Yahoo can use its reach to make real money off of these webisodes (we actually think it has a good shot).
Click here for an example of branded content Break.com made for Kentucky Fried Chicken.