Google and MediaVest have signed an advertising deal worth tens of millions of dollars over the next year. In the deal, MediaVest clients, including Walmart, Coca-cola and Honda, will have ads placed on Google’s mobile app network, AdMob as well as their display network and YouTube. This is a significant deal not only for the two companies, but for digital advertising agencies everywhere. In the past, most digital advertising was done on a pay per click or pay per impression basis. This deal, in contrast, is an upfront payment for the services.
This advertising deal appears much more similar to television advertising contracts than other digital ad options of the past. MediaVest is paying an up-front price for access to Google’s marketing tools, regardless of how successful the campaign is. Google is getting committed advertisers over the next year, which can bring additional stability to the amount and type of ads they will display. At first glance, this seems to be a win-win situation for both companies.
Of course, Google and MediaVest are to extremely established companies, which is one thing that makes this type of marketing deal possible. Whether similar ad agreements will be made with smaller marketers is not yet clear. The simple fact that this is even a possibility, however, illustrates how far the digital advertising world has come.
Brian Terkelsen, the Chief Executive of MediaVest said the following in an interview with The Financial Times, “For years, the digital world has been asking for the dollars and laying out a case for why. This is a moment in time where we are beginning to see a new level of transparency, a new level of partnership and a new appreciation of the size of the prize that is available.”
Google’s managing director of agency business development, Torrence Boone said, “In many ways, the deal confirms the tremendous momentum that we have on YouTube and the importance of online video to brand marketers.”
In addition to placing the ads on the various Google owned advertising platforms, Google is also providing creative resources to help MediaVest develop their campaigns for the clients, as well as analytic support to help measure how successful the marketing actually is.
This deal was first reported by the financial times, which you can read HERE (subscription required).
