Mondelez Strikes Deal With Fox to Innovate Ad Model
Mondelez has struck a deal with Fox to help innovate ad formats and work on reducing commercial clutter. The deal represents a material commitment by the maker of Oreos and Ritz crackers to establish a more consumer-friendly commercial experience in streaming video and video-on-demand.
As part of the pact, Mondelez will expand its use of TrueX, the ad-tech platform Fox acquired in 2014, to create a more engaging ad experience, collaborate with Fox to create new ad formats and help set the standard for what commercials will look like on VOD and streaming.
While Mondelez has been experimenting with TrueX's engagement ads, which allow viewers to interact with one ad at the top of the program in order to then watch content sans commercials, this moves beyond the testing phase.
"This is a cornerstone of our digital commitments," said Kristi Karens, North America lead-media and content, Mondelez. "It is not a small dabble, but a significant portion of our investment and overall deal with Fox."
This is not coming out of Mondelez's "test and learn budget," Ms. Karens added, but is part of the company's core media budget and overall media strategy.
Ms. Karens declined to provide specific financial terms of the deal, only to say that its commitment to TrueX is five-times bigger than all other digital dollars it's allocated across all the Fox properties.
"In a very fragmented media world we are picking our partners to do deeper deals with and to utilize more of their assets," said Andy Donchin, chief investment officer, Amplifi U.S. a Dentsu Aegis Network, Mondelez's agency of record.
After several years where digital was the "wild, wild west," Mr. Donchin said the agency is now looking for more accountability for their digital investments on behalf of clients. To this end, they are focused on picking digital players where they know people are engaging and watching the content, and where fraud is limited.
"A lot of our digital spend is more concentrated on premium content," Mr. Donchin said.
Instead of simply buying ad inventory, this deal allows for collaboration.
The goal for Mondelez is to tackle issues that have plagued TV and digital advertising like commercial clutter, ad blocking and viewability, while increasing accountability, Ms. Karens said.
"This is a commitment to rethinking the ad model," said Joe Marchese, president – advanced advertising products, Fox Networks Group.
And as Fox rolls out new formats on platforms, Mondelez will get to be there first, he added.
Thus far, TrueX has predominantly been experimenting with its engagement ad format on Fox.com as well as on Hulu.
One possible new ad format on VOD may include the ability for one advertiser to sponsor an entire episode to tell a sequential story through the commercial breaks, Mr. Marchese said. This would allow Fox to reduce the ad load in VOD and break away from the repetitive ads that have been the norm on-demand.
The partnership will also include branded content, the first of which, the previously announced live event "Heaven Sent," will air on Fox on July 30. The live broadcast will feature skydiver Luke Aikens jumping from 25,000 feet with no parachute.
Mondelez is one of several marketers that are investing in creating content with media companies in the hopes of engaging viewers who are becoming increasingly harder to reach as they consume content on non-ad supported platforms or find ways to avoid commercials altogether.
Elsewhere, Mondelez is working with BuzzFeed on integrations and is investing in branded games, the first of which features its Sour Patch Kids and is due out later this year.
Typically, reduced commercial loads mean higher pricing as networks try to make up for lost revenue associated with fewer commercials. But it's difficult for media buyers to justify increased pricing.
But Mondelez partnering with Fox in this way allows for a "preferred cost position," Mr. Donchin said.
"Deals like this give the agency permission to justify cost," Mr. Marchese said. "These are different types of impressions."
"The greatest thing that could come out of this for Fox is to maintain revenue while offering a significantly better consumer experience and reducing the ad load," Mr. Marchese said.