VZ Verizon Communications Inc

By Mike Shields 

Verizon Communications' new mobile content service go90 is only just starting to lure users after kicking off a beta test a few weeks ago. But the millennial-focused video service already has a major advertiser commitment.

Publicis Groupe, the world's third-largest advertising group, has signed on for a yearlong ad partnership with go90 starting next month, said executives at AOL, the Verizon unit which is handing advertising sales for the new service.

The deal, which includes three months as the exclusive advertiser on the service, is worth close to $50 million and involves more than 10 Publicis clients, said a person familiar with the matter. The two companies will look to develop ad offerings and other products together over the next few months, this person said.

Go90 officially launches this week, featuring short-form content from a slew of partners, ranging from the National Football League to Comedy Central to YouTube-born videos from Machinima and AwesomenessTV. The service is free to consumers and supported by advertising.

The challenge for Verizon is that it's trying to win over the attention of teens and 20-somethings who already have a plethora of mobile video options from Facebook, Vine, Snapchat and YouTube.

AOL, which Verizon acquired for $4.4 billion earlier this year, is leading the go90 sales charge, which includes an Advertising Week party and presentation in New York on Monday night. During the event, AOL plans to share more details on how it plans to weave ads into go90.

Initially, go90 will carry pre-roll and mid-roll video ads, including repurposed TV ads. But the hope is that advertisers will build out more custom ad units that take into account mobile screens and functionality, said Chad Gallagher, AOL's global director of mobile.

Besides the Publicis deal, go90 has locked up several upfront ad commitments for next year, Mr. Gallagher said. Most of these deals are coming from direct negotiations, but the plan is to sell go90 ads through AOL's programmatic suite of tools that let advertisers target users based on anonymous Verizon Wireless customer data and other sources.

AOL also is urging companies to experiment in distributing sponsored content via go90. For example, a brand like Honda, which sponsors numerous concerts, might distribute clips of a recent show via the video service, along with subtle ad messaging. Other brands might look to produce and distribute documentaries via go90.

Marketers can also curate specific video content tied to a particular lifestyle, such as extreme sports, and present that to consumers as part of a content package they can "follow" on go90--much like they do on other social networks.

Mr. Gallagher claimed that in light of the declines in live TV viewing among go90's young adult target audience, he's finding huge interest among advertisers, despite the fact that the service's success is not a given.

"There has been more [advertiser] demand against this than anything I've ever done," he said. Given the combination of premium content and sophisticated ad-targeting options, "marketers are salivating," he said.

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(END) Dow Jones Newswires

September 28, 2015 18:14 ET (22:14 GMT)

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