Mondelez Announces its Deal With Google(Nasdaq:GOOGL)

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By Chris Hillman on October 2, 2014 Financial

Mondelez International Inc. (NSDAQ:MDLZ) has adopted the strategy to increase investment on different platforms of social media, particularly video. As an implementation of this strategy, the company has signed an agreement with Google Inc. (NASDAQ:GOOG). The deal was announced yesterday in a press release.

Mondelez International Inc. (NSDAQ:MDLZ) will invest 10% of their promotional budget in online video in the current year. They believe that this will accelerate their sales growth and buying in the diverse portfolio of brands that they possess. Of course, ad exchanges will help in the growth process as well.

In today’s rapidly developing world, many consumers fulfill their media entertainment requirements through platforms of digital and social media. All thanks to the advent of smart and portable devices like tablets and smartphones. Approximately 60% of the users opt for web-based services for several purposes – from buying a new phone to finding the nearest five star restaurants.

Thanks to this very social media, many companies can easily reach out to their customers throughout the world. Mondelez International Inc. (NSDAQ:MDLZ) has always adjusted their promotional budget to adapt to the rapidly changing trends in the digital and social media and yet, they are lagging behind. With the motivation to bridge this gap and move forward, the company has made an agreement with Google Inc. (NASDAQ:GOOG). This agreement will include an advertising commitment which will help Mondelez International Inc. (NSDAQ:MDLZ) achieve its aims in:

Expanding the power brands
Spending on breakthrough technologies
Expanding innovation platforms at a global level

The significance of online video cannot be underestimated; it helps to reach a greater market, millions of consumers, on both global and local levels, which then increases the demand of the power brands of the company and also aids a rise in the return on investment of the company.

Nonetheless, the deal between Mondelez International Inc. (NSDAQ:MDLZ) and Google Inc. (NASDAQ:GOOG) will be a major step that will help the former emphasize on social media and position itself as an innovator in the digital media. Google Inc. (NASDAQ:GOOG)’s expertise will help Mondelez International Inc. (NSDAQ:MDLZ) bring a radical change in their approach to digital media that will allow the latter to achieve media buying and creative production at the same time. This will lead to major cost reductions.

Several thousands of companies upload creative videos on several web-based platforms of social media. The most popular online video platform is, yes you guessed it, YouTube. Uploading videos helps the companies reach thousands of customers at a global level, attracting them towards their services and products.

The deal between Google Inc. (NASDAQ:GOOG) and Mondelez International Inc. (NSDAQ:MDLZ) is a great opportunity for both companies actually. The latter will work with the former to generate creative new advertisements for its most famous brands that include Oreo, Toblerone and Trident. The deal will also allow the companies to increase brand building online. Overall, this is a win-win agreement which has great potential for both companies.