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CNBC Correspondent
On the heels of Yahoo!'s [YHOO
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] better than expected earnings after the bell Tuesday, the web giant will announce a partnership later today that represents a new focus on original content. I have the early scoop: Yahoo! is about to announce it's partnering with ad giant WPP's [WPPGY
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] Group M Entertainment to together produce new branded webisodes, both companies bringing in advertisers, together developing concepts that will work for them.
This is Yahoo!'s first production partnership with an ad agency as it pushes to distinguish its inventory, giving advertisers starring roles in popular web shows to engage with users.
Yahoo! already has ten branded shows that run on its various sites — news, finance, sports, etc.
Some are huge hits, like "Tech Ticker," sponsored by Scottrade, which averages 450,000 streams daily.
All-in, these shows reached 16.3 million unique US visitors last month. But Yahoo's self-produced shows comprise just ten percent of its video views, and the company says advertisers are consistently demanding more original content to match their marketing message.
By partnering with Group M Entertainment the company will be able to ramp up its original content output — it aims to make 20 percent of the video on its site original within a year. Group M brings its proven track record, it produced branded hits like "In the Motherhood" for Unilever's [UN
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] Suave and Sprint [S
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]. Now the team will be able to draw on their relationships with both company's clients. And Yahoo will be able to draw on the trends it can extract from its 500 million users online patterns.
Back when Terry Semel ran Yahoo, content creation was also a priority, but this time around neither Yahoo now WPP will take much risk on new productions. They won't start making any of the shows until an advertiser/sponsor is signed, sealed and delivered. Gartner analyst Mike McGuire points out that the success of the new shows all hinges on the appeal of the content, which is the big challenge Hollywood faces every day. But here Yahoo has the advantage of a low cost of entry — webisodes can be made inexpensively inexpensive — its huge built-in audience, and the fact that it can carefully track how its users react to the content.
Yahoo's push to make and own its own content is a different approach than rival Google [GOOG
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], which has said repeatedly that it's not a content creator. Google defines itself as an aggregator or a curator, but it says it's not interested in shooting its own web shows. CEO Carol Bartz is really distinguishing her strategy by putting value on original content; we'll see where she takes it from here.
Questions? Comments?
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