The rise of content marketing and native advertising occasionally makes for strange bedfellows, as in a recent alliance between ad agency Leo Burnett and digital publisher The Huffington Post, which the companies plan to announce Monday.
Under the agreement, HuffPost Partner Studio, the publisher's in-house team that creates articles, videos and graphics for advertisers, will work with Leo Burnett to develop strategies and then produce content for the ad agency's clients. The work will be distributed across The Huffington Post as well as other websites and social platforms owned by AOL. One or two employees of HuffPost Partner Studio will work in the Leo Burnett office in Chicago several days a week.
Participating Leo Burnett clients will also have access to proprietary data from the publisher's social media platforms. The Huffington Post's newsroom is not involved.
"The goal is to see a measurable increase in engagement and participation for the clients," said Arianna Huffington, president and editor-in-chief of The Huffington Post Media Group.
The Huffington Post will be paid for the content it co-creates on behalf of clients and for the supporting ad space Leo Burnett clients buy on the site or across its parent AOL network.
Mark Renshaw, chief innovation officer at Leo Burnett North America, declined to say which clients will work with the Huffington Post at the start.
"We want to have ideas that people participate with," Mr. Renshaw said. "We know that HuffPo is an amazing publisher when it comes to participation. It really made sense for us to come together."
While agencies excel at creating big brand campaigns that combine TV, print, radio, outdoor -- you name it -- marketers increasingly want the kind of content that media companies produce. And they often want it at the speed of the news cycle.
"When it comes to writing up a lot of stories, a lot of content, there's no one better to do that than publishers," said Jimmy Maymann, CEO of The Huffington Post. "I think that's also what the advertising agencies are realizing. If you need to produce 5, 10 stories on a daily or weekly basis, right now I know that very few agencies are set up to do that and very few advertisers are set up to do that."
Not long ago, a tie-up between an ad agency and a publisher's in-house creative-services team was unlikely. Publishers have long touted their creative-services divisions as roughly on par with ad agencies. We know our audience better than anyone else, the publishers insist, so pay us to make your ads. Agencies were incredulous.
But marketers are expected to spend nearly $2 billion on sponsored content this year, according to an eMarketer report. All that money has sparked a brawl among publishers, creative agencies, media buyers and PR firms eager to steer that money into their coffers.
"There's so much competition out there between all the different companies and publishers and people," said Mr. Renshaw.
It's brought some of these competing companies in league with each other. For instance, BuzzFeed, which makes nearly all its revenue selling branded articles and videos, trains media-buying agencies on how their clients should produce articles that will resonate with its audience. And writers from BuzzFeed's business side work with DigitasLBi as part of the "BuzzFeed in Residence" program.
The idea behind the Leo Burnett-Huffington Post tie up is that a creative agency understands the brand and the publisher understands its audience. Marrying these relationships will lead to stronger content, the companies said.
Messrs. Maymann and Renshaw said the partnership is not an admission that either company is falling short. "Both of us, potentially, could do what each other does, so it's really just an accelerating function," Mr. Renshaw said. "It will be faster, cheaper for us to work together."
The Huffington Post also has an enormous audience that Leo Burnett's clients can reach. In August, the site attracted nearly 107 million people across desktop and mobile devices, a 54% increase over the prior year. Its primary Twitter account has 4.7 million followers; its Facebook page has 4.3 million "likes."
AOL does not break out financial information for The Huffington Post, but AOL CEO Tim Armstrong said last year that he expected the site -- which the online behemoth bought in 2011 for $315 million -- to become profitable in 2014. AOL's Brand Group, which includes The Huffington Post, TechCrunch and Moviefone, generated $185.7 million in revenue in the second quarter, a 2% decline from the same period last year. The company said the decline resulted from the absence of revenue from "shuttered and de-emphasized brands" such as Patch, the hyperlocal site. Excluding that effect, Brand Group display revenue grew 4%, AOL said.
Mr. Maymann said Huffington Post's various sponsored content products comprise 30% of its advertising revenue. "This whole space has gone from not really being meaningful to being very meaningful for publishers at scale," he said.
An agency executive who asked not to be identified discussing a competitor said partnerships between media companies and creative agencies are "inevitable" as ads become less distinguishable from editorial. Adland should expect to see more of these tie-ups, the executive added.