Mar 10, 2020 - Economy & Business

Exclusive: Inside Quibi's advertising strategy

GIF: Quibi

Quibi, the mobile video streaming service set to launch next month, has capped its ad partnerships for its first year at 10 companies, according to executives.

Why it matters: Quibi has sold out its first year in ads — $150 million in revenue  — ahead of its April 6 launch. That number is fixed via pre-sold ad agreements with those 10 companies.

Details: The 10 exclusive partners are Progressive, Discover, General Mills, Procter & Gamble, AB InBev, Taco Bell, Pepsi, T-Mobile, Google and Walmart.

  • At launch, Quibi will feature ads from over 25 brands that are owned by those 10 ad partners, including Lays, Doritos, Tide, Cheerios, Nature Valley, Yoplait, Pepsi, Mountain Dew, Charmin, Budweiser Light and Old El Paso.
  • It will not expand the number of partners in its first year, although those partners can introduce new brands to the platform during that time. For example, if Google wanted to start running YouTube or Waymo ads, that would be acceptable.
  • As a part of its launch pitch, Quibi promised advertisers that they would be the exclusive brand in its vertical, meaning that because it's launching with Procter & Gamble as a partner, it won't run any ads from Unilever.

How it works: Companies can run a pre-roll ad that can be either 6, 10 or 15 seconds long before an episode of any show. The ad load means that each brand will exclusively sponsor each episode of a show. The platform won't have any mid-roll ads or ad pods.

  • Longer ads are recommended for longer Quibi shows that are in the 5–7 minute range. Shorter ads are recommended for shorter shows in the 1–5 minute range.
  • In total, Quibi will run 2.5 minutes of advertising for every hour of programming. Its ad load is low compared to traditional television, which typically runs roughly 16 minutes of ads per hour. It's more in line with the ad loads on social media sites.
  • All ads are non-skippable.

Quibi hasn't accepted any political ads as part of its first year of ad sales, according to a source familiar with its plans.

The big picture: All advertisers will be encouraged to leverage Quibi's "turnstyle" technology, which allows users to seamlessly switch between vertical and horizontal video on their phones.

  • Advertisers have the same tools and capabilities that content creators do, including access to experts at Quibi who can help them create "turnstyle" ads.
  • So far, creators seem to like it. "We love this new format and look forward to continuing to tell our story in Turnstyle," says Rob Reinerman, brand director at Charmin.

Quibi's advertising efforts are led by former Flipboard executive Nicole McCormack, who reports directly to Meg Whitman, CEO of Quibi.

  • "I am impressed by how quickly and enthusiastically our brand partners have leaned in and embraced these new formats and capabilities,” says McCormack.
  • Previously, McCormack reported to Tim Connolly, Quibi's former head of advertising and partnerships, who left in August.

Be smart: Whitman told Axios in an interview in January that she expects the majority of subscribers to Quibi's service to choose the ad-supported tier, which puts more pressure on the company to get the ad experience right.

What's next: The company is currently in a legal battle over its patent-pending "Turnstyle" technology.

  • Eko, a media and technology company, has accused Quibi of patent infringement, according to a complaint filed Monday in California federal court.
  • A Quibi spokesperson said, “Our Turnstyle technology was developed internally at Quibi by our talented engineers and we have, in fact, received a patent for it. These claims have absolutely no merit and we will vigorously defend ourselves against them in court.”

Go deeper: Quibi unveils "Turnstyle," its flagship mobile video format

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