TV marketing in the streaming era has become defined by data. But as TV has evolved for modern advertising, ad executives argue the medium has moved too far away from what has made it irresistible to brands in the past: the content.

Marketers are showing an increased interest in returning to branded content, especially as media companies, beset by linear TV losses, have spent the last several years inundating the market with audience targeting tools to chase digital ad dollars.

Co-branded advertising, sponsored companion programming, featured segments in shows or a wholly branded production have been on the rise, according to multiple marketers and ad sales executives. Brands, including Chick-Fil-A and Anheuser-Busch InBev, have also been creating in-house production studios. 

“What is old is new—brand partnership is as old as TV itself, but it’s early days in streaming,” said Brian Toombs, head of Roku Brand Studio. “Brands are storytellers … and [branded content] will continue to grow because I’m seeing a lot more great work being produced, but it needs a home” for mass distribution.

While branded content has been on the rise for the past few years, streaming has now reached an inflection point. The audience scale is beginning to catch up to the advanced capabilities streaming offers, and the content pipeline is recovering from the pandemic and 2023 Hollywood strikes, said Ryan Gould, head of streaming, digital and advanced advertising sales and client partnerships at Warner Bros. Discovery.

After experiencing production delays due to last year’s strikes, HBO’s “The Penguin” will begin airing on HBO and streaming on Max on Sept. 19. NerdWallet will sponsor the show on Max, leveraging a title sponsorship offering that was key to WBD’s upfront pitch, aligning brands with HBO series previously unavailable to advertisers.

The sponsorship includes custom spots featuring the first original character co-created by WBD’s brand studio Courageous and DC Comics on behalf of a brand: Super Nerd.

NerdWallet’s partnership with “The Penguin,” which equates to a 50% share of voice for the series on Max, offers viewers an ad-free experience after viewing its on-theme ad. The partnership is part of the brand’s larger “Fact Check Your Finances” campaign aimed at encouraging people to seek financial advice from professionals rather than friends or social media.

“For some brands, consumers are leaned in and they’re excited to hear what the brand has to say,” said Alison McCoy, VP of brand marketing at NerdWallet. “With us, we have to really capture their attention and make NerdWallet impossible to ignore in moments they already are in.”

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NerdWallet’s partnership with “The Penguin” stems from an insight that its consumers are disproportionately comic book fans. It collaborated with WBD on the co-branded sponsorship so that the depth of creative integration with the DC comics brand would make the spot look like an extension of the show, as opposed to an ad. 

Although traditional TV metrics such as awareness and mass reach are key measures for its broader campaign, McCoy said its partnership with “The Penguin” is specifically aimed at driving higher consideration over competitors with existing consumers who tune in for the show. To further engage with this audience, NerdWallet will sponsor HBO’s companion deep-dive podcast for “The Penguin.”

Branded content in the upfront

Exclusive content was an ongoing trend among pitches from upfront presenters this year. WBD flaunted its slate of IP from “Harry Potter” to “Barbie” during its show; NBCUniversal gave significant stage time to its upcoming film “Wicked;” and Paramount focused on bespoke partnerships for its live event and award show broadcasts.

But not all went according to plan, according to WBD’s Gould. 

“Our original [upfront] strategy was to incorporate these sponsorship opportunities on the front end of our deals, but we had to quickly pivot and iterate, and we put it on the back burner,” said Gould. Rather, this year’s upfront market was defined by buyers seeking price reductions from media companies in streaming, said Gould. 

Now, Gould said WBD is “leveraging our IP and sponsorship opportunities to polish up our [upfront] deals” after negotiations have wrapped up. But demand in scatter has been high, according to the executive, and sponsorships will be a key component in negotiating higher pricing in scatter market deals.

Focusing branded content partnerships will be valuable for WBD, according to Gould, because the quality of its content is its primary differentiator from the many other media companies competing for TV and streaming ad dollars. Max will feature as many as 10 exclusive sponsors that invest in varying degrees of custom content in major series such as “House of the Dragon,” while smaller series will have about four sponsors, Gould said.

As Max seeks to grow its streaming subscribers, Gould said he can see a future in which any show could handle 15 to 20 sponsors in an effort to keep traditional ad loads light in streaming.

 Title sponsorships on Max start in the range of $3 million to $4 million, and scale based on customization of the partnership, Ad Age previously reported. 

Gould said that increasing the number of sponsors for a coveted title will keep pricing for title sponsorships lower, although some shows, such as the upcoming third season of “The White Lotus,” command enough demand to seek “$5, $7, $10 million-plus partnerships for 10% to 20% share of voice.” 

In addition to sheer audience scale, this will be possible because of Max’s recent launch of its first-party data platform Olli, which can more precisely pair advertisers with granular audience targets.

“The upfront continues to be a period that is very focused on price and volume discussions, and [larger sponsorships] get built off of that,” said John Halley, president of advertising, Paramount, adding that the growing emphasis now in the months after upfront talks ended on pairing content, traditional ad inventory, custom content on social and more with one media partner “represents a new sophistication in the marketplace that’s exciting.”

‘The new advertising’

“Advertisers have been living in a world of disruption—disruption has been the buzzword for the last couple of years,” said Kerry Doyle, executive VP, Carat Content, the branded content practice within Dentsu’s Carat. “Branded content is the opposite, especially when done right. Integration is about adding to their viewing experience, enhancing the entertainment, not interrupting it. And a lot of clients are telling us that they feel that content is the new advertising.”

Two decades ago, Doyle said, branded content could be as simple as inserting a brand into an episode of “American Idol” and counting on the show’s impact to bring the brand along. But the game has since changed with advanced measurement capabilities and ad formats in streaming. Now, Doyle said, branded content is an element media planners can incorporate into client strategies to achieve specific metrics, particularly as part of larger media buys. 

Home Depot has struck multiple branded content partnerships over the past few years, such as a co-branded series with Vizio last holiday season and, more recently, integrations within Roku shows “This Old House” and “Honest Renovations.” Alongside the in-show moments, Home Depot ran shoppable ads that featured QR codes, the ability to shop directly through the TV remote and on-screen talent verbally prompting the user to shop. While connecting TV creative with direct sales is ultimately the goal, Home Depot is using this developing format to develop new ways to interact with viewers, particularly young viewers, as well as to participate in training viewers as TV transitions into a shoppable medium, said Christine Reed, director of media, Home Depot.

Reed said it’s working: Home Depot has measured an increase in interactions with interactive streaming ad formats year-over-year. While the brand doesn’t have data yet to confirm whether young consumers are driving this interaction, Reed compared it to influencer marketing, in which young consumers are more attracted to branded and shoppable content that features talent and matches the content format they logged into a platform to consume.

Similarly, Ally Financial partnered with Roku to co-create a series with Reese Witherspoon’s media company Hello Sunshine. “Side Hustlers,” which streamed its second season in August, follows female entrepreneurs as they vie for investment from the show’s hosts, Ashley Graham and Emma Grede. As part of the series, the women receive financial advice in segments hosted by Ally.

Throughout the show, which reached No. 1 on Roku’s ad-supported platform The Roku Channel, Ally ran ads featuring its in-show talent, including its Head of Money Wellness Jack Howard, sharing Ally’s brand messaging. The pairing of branded content and traditional advertising is critical, said Bridget Sponsky, executive director, brand and sponsorship marketing at Ally Financial, because it gives brands greater control over measuring branded content.

Sponsky said measuring branded content alone would be complex, but that Ally “put a lot of work into how we used the assets that surrounded the programming so that we could actually measure KPIs.” Ally found the show led to a 105% lift in brand trust, 116% lift in recommendation and 89% lift in likelihood for a viewer to open an Ally account. The partnership was also part of Ally’s commitment to investing in women-led media. The brand has continued to seek out branded content opportunities, including a recent integration into FX’s “Welcome to Wrexham” in which Ally sponsored the Welsh soccer club’s women’s team in a U.S. tour.

Brains divided

Streaming ad sales teams need to speak both the analytical and creative languages marketers use, WBD’s Gould said. The ongoing branded content trend is evidence of those elements merging back together.

More than half of WBD’s current clients in streaming are investing in a mixture of data-driven and creative-driven inventory, while the other half prefer one or the other (data-driven being the majority), according to Gould. But increasingly, Gould is taking client meetings that bring both the media and creative agencies into one room to discuss opportunities for new ways for brands to uniquely match their advertising with media partners’ platform offering.

Gould said Max’s strength is in the quality of HBO’s content, whereas Roku may offer pairings of content with advantages in data and marketing on the CTV home screen or traditional network groups may place custom ads across a large portfolio.

Paramount recently partnered with PepsiCo on a co-branded spot that put the brand in the realm of Paramount’s upcoming film “Gladiator 2” with performer Megan Thee Stallion. The spot, which featured a remixed version of Queen’s “We Will Rock You,” is tied to the NFL season. It also included extensions on social, the song on Spotify and recently, Megan Thee Stallion wore the ad costume while hosting MTV’s Video Music Awards, the first time Paramount has featured an awards show host presenting a brand spot. Prior to the event, the partnership had already attracted 20 billion impressions.

“There’s been a lot of discussion around the [TV] business’ move to KPI-dominated, performance marketing frameworks, and what that actually does for the advertiser—just because you can measure it doesn't mean that what you’re getting is good for your business,” said Paramount’s Halley. “Marketers kind of lost their grip to make their spending more efficient. They tended to focus on the things that delivered short-term results, and in the course of that, lost the narrative with the consumer.

Now, Halley said brands are increasingly looking to balance the creative ways in which they can grab consumers’ attention in TV, with the complement of granular understandings of performance metrics such as return on ad spend, rather than sacrificing one for the other.

But branded content can be a high risk investment, especially as consumers grow increasingly weary with ads as they’re inundated with marketing across various screens. 

For example, consumers and entertainment press alike were quick to call out a branded segment during last weekend’s Emmy Awards on ABC, in which actors Ebon Moss-Bachrach (“The Bear”) and Taylor Zakhar Perez (“Red, White & Royal Blue”) exchanged awkward banter about a bottle of Johnnie Walker Blue Label before presenting an award. Similarly, segments of the August “Love Island: USA” reunion on Peacock were called out by fans who were annoyed by contestants repeatedly snacking on Pizza Hut menu items throughout the show.

Gould said the increased demand for branded content inherently leads to high risk, high reward scenarios as these integrations make their way in front of larger audiences. And while certain elements may match—a nominated actor showcasing a luxury spirit at a glamorous event—it simply may not resonate with audiences.

For many brands, the investment and time may not be worth the potential outcome—Home Depot and NerdWallet both put their partnerships around four months while Ally said developing the co-produced show took longer.

And each marketer described the importance of being stringent in selecting the perfect media partner for each project. Ally’s Sponsky said Roku was a meaningful partner in garnering enough attention for “Side Hustlers” that all of their work wouldn’t be wasted on small audiences; Home Depot’s Reed pointed to the importance of Roku’s data for reaching the correct audience in its work as well as its device-level technology to enable shoppability; and NerdWallet’s McCoy said the creative collaboration with WBD and DC was a top priority in its partnership.

“Is branded content a luxury? It’s a strategy,” said McCoy. “Certainly the stronger the relationship with the media partner,  the more you’re going to be able to experiment and test new things—that might be a luxury of time and resources … But if your goal is to go deep and to connect with [consumers] in meaningful ways and resonate as a brand that cares about what they care about, that wants to create a friction-free experience in which they can actually listen to your message and pay attention to what you having to say, to me that’s a no brainer.”