Wikipedia Definition

Branded content is a relatively new form of advertising medium that blurs conventional distinctions between what constitutes advertising and what constitutes entertainment. Branded content is essentially a fusion of the two into one product intended to be distributed as entertainment content, albeit with a highly branded quality. Unlike conventional forms of entertainment content, branded content is generally funded entirely by a brand or corporation rather than, for example, a movie studio or a group of producers. Branded entertainment is used in events and installations, film, video games, music, the internet, and television.

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Effectiveness

Producing branded content has become an extremely effective tool for advertisers in this day and age. The outcome of well made branded content can do wonders for the company producing it, but only if the content is made properly. Not only do they have to make sure that their product is being sold as successfully as possible, they also have to ensure that the content they are producing is exceptionally well done and sort of tricks the viewer into seeing the short film as something more than an advertisement. The most successful branded content programs are able to blend the advertising message in a seamless and transparent fashion, literally making it a part of the storytelling, while still getting the information across to the consumer.