GroupM Inks Year-Long BuzzFeed Deal for Data, Creative and Preferential Rates
WPP media agency network GroupM and BuzzFeed have signed the latest in a series of deals in which agencies and media companies pool their resources in areas such as creating ads.
GroupM will get preferential rates, dedicated staffers in BuzzFeed creative studio BuzzFeed Motion Pictures, and exclusive access to BuzzFeed's proprietary data and analytics platform, Pound, as part of the year-long global partnership.
BuzzFeed gains what will likely be its biggest book of business from an agency group and its clients, as well as an endorsement for Pound, which began operations this year but has not yet been offered up to agencies. Pound tracks and reports how BuzzFeed content is consumed and shared.
The deal involves no investment or equity exchange between the companies, they said. Neither party would disclose specific terms, including the amount that GroupM has committed to spend with Buzzfeed, but Rob Norman, chief digital officer at GroupM, said, "We have a multi-million-dollar relationship with Buzzfeed already, and given the commitments they've made to clients and services and rates, our expectation would be of at least 50% year-on-year growth."
For Buzzfeed, the deal is one clue to how the media company plans on expanding in the United States and abroad. "In the last week, we announced an NBCU deal with a $200 million investment," said Greg Coleman, president at BuzzFeed. "We announced a Yahoo Japan deal which is a joint venture. This is the third big deal that we've announced. What it's saying is that as we're growing, we're also looking to work with partners. It's something we really have not done until now. We decided to go all in."
It's a novel arrangement for GroupM, too, said Mr. Norman. "We do not have a deal with other media companies that combines media, production and data all in one go," he said. "They're data-driven in terms of understanding data and applying it to media, but also in applying data to creativity and understanding how creativity performs."
The deal comes as marketers are looking for creative ways to reach consumers through entertaining sponsored content, often referred to as native advertising, that doesn't look like a traditional ad. Not coincidentally, that's the only kind of ad BuzzFeed sells. Agencies are also bolstering their relationships with media companies that have access to data and, in the case of digital video and TV, celebrity talent. Deep Focus, for example, recently created a branded entertainment offering with a handful of media and production companies. WPP-owned agency Group SJR this summer completed a deal to open a content agency called Truffle Pig with The Daily Mail and Snapchat.
GroupM owns media agencies MEC, MediaCom, Mindshare and Maxus, as well as digital and data entities such as Xaxis. Its buying power puts it in good position to negotiate favorable deals with publishers such as BuzzFeed -- deals which may in turn ultimately influence GroupM clients' creative process. GroupM has named point people to work with BuzzFeed's creative studio not only at its own media agencies but at a handful of WPP creative shops. "We'll say we think we have an opportunity for you, client, and your creative partners, to work with the BuzzFeed Motion Pictures studio, and the GroupM agency, to develop a combined creative, distribution and data deal," Mr. Norman said.