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Producing primetime drama might not seem like the obvious solution to flagging TV revenue models, but it's an option WPP is currently pursuing in the US.

Group M, WPP's media planning and buying arm, is co-producing a six-part series entitled October Road with Touchstone Television for the ABC network. The deal sees Group M fund 50 per cent of the production in return for a bank of ad slots on the channel.

While October Road is not a radical departure for Group M - MindShare Worldwide, a Group M agency, fully financed and produced a summer drama series called The Days for ABC two years ago - this latest deal has been struck independently of Group M's clients. The Days, by contrast, saw MindShare clients such as Sears Roebuck and Unilever carve up the show's ad breaks between them.

In Group M's eyes, this separation between client and TV content, as well as the absence of any product placement, sets its deal with Touchstone apart from ear-lier advertiser-programme agreements. "Group M is co-producing independently of clients a show to put on the air," Rino Scanzoni, the chief operating officer at Group M North America, says. "We get advertising time in all of ABC programmes, and we make that available to our clients."

For Scanzoni, the advantages of this new model are clear. "It's a way for us to have some input and interest in intellectual property," he says. The networks, meanwhile, gain a high-budget programme for their schedule. "If it works out, it benefits the network which might not otherwise be able to fund the show," he says. "The networks realised that they are in the business of finding hit shows, and the higher the number of shows they put on the air, the more likely they are to have a hit. They can use their advertising time to fund that."

The US is not the only broadcast market WPP has trained its sights on. Sir Martin Sorrell, the chief executive, recently announced plans for the group to make TV dramas worldwide, subject to regulatory approvals. While WPP is clearly setting great store by advertiser-programme deals, it is debatable if other major players will follow Group M's lead. "It's not necessarily something other agencies will embrace," Scanzoni admits. "Getting involved in general entertainment programming is a very risky proposition."

Money is likely to be the biggest hurdle for most agencies in the UK. "The cost of involvement is the major consideration," Chris Hayward, the head of investment at ZenithOptimedia, says. "These are not small-scale projects. While there is great potential, most people aren't well fixed to have that money at their disposal. It's an arena in which the number of potential players is relatively small. I don't see a mass movement away from large spends on ads."

Richard Oliver, a managing partner of investment at Universal McCann, agrees in the short term. "I don't think we will see an agency putting forward the money," he says. "I don't see us making that move at this point in time. The landscape isn't ready quite yet." Oliver is, however, convinced that the industry will eventually team up with TV companies to produce content.

"It's something everyone is increasingly considering," he says, pointing to Universal's move into this market with the TV movie The Flight of the Reindeer made with Coca-Cola and Johnson & Johnson for CBS in 2000. "It's a new model coming through as the 30-second spot is expected to diminish in efficacy over time. It's something we'll be seeing a lot more of."

The model undoubtedly has attractions for an industry struggling with the onslaught of personal video recorders, decreasing young TV audiences and weak commercial programming. "There are basic pressures around PVRs and people shuttling through the ads, so everybody will be looking at it," Grant Duncan, the Publicis chief executive, says. "The issue is creating content that can live outside the 30-second commercial. To make sure the ads get seen, you can embed the message into a programme."

While agencies can see the value in embedding a message in a programme, they are more cautious about placing products in a show, as MindShare hopes to do in its future co-production deals. Product placement is still banned in the UK, but this could change when European broadcasting ministers discuss proposed revisions to the Television Without Frontiers directive later this month. Regardless of any potential regulatory change, audiences are still wary of in-show advertising. "It's a difficult area," Oliver says. "British consumers are very media savvy and would be quick to reject it."

Audiences may be quick to reject product placement, but advertising agencies are certainly giving content production serious thought. For Duncan, who says Publicis has no formal position on advertiser-programme deals but is "very interested in pursuing it as an option", the transition seems natural.

"Advertising agencies are good at working out simple brand propositions," he says. "Once you have a clear starting point, that doesn't just translate into ads, but could translate into whole series. What we create is content and it comes down to trying to find commercialised content."

As TV audiences continue to fragment and migrate to the internet and mobile, traditional routes of TV distribution are not as powerful as they once were. Channels are losing ground to content capable of playing across multiple platforms. For media agencies willing to take a gamble on content production, this shift could open the door to another revenue stream.

"Distribution, which was the control element, will become secondary," Scanzoni says. "Content is going to drive the train."