Snapchat, Viacom strike unique deal on ad sales
Viacom Inc. has signed a multiyear deal with Snapchat Inc. to sell ads on behalf of the popular photo- and video- sharing app and increase the amount of programming on it.
The unique arrangement is a coup for Snapchat, enabling the TV advertisers the company craves to buy ads on the app at the same time they purchase spots on Nickelodeon, MTV and other Viacom networks.
“We can now offer television advertisers a way to tell their stories across television and mobile in a frictionless way,” Imran Khan, Snapchat’s chief strategy officer, said in a statement.
Snapchat’s size — 100 million daily users worldwide — has attracted many advertisers. It also offers unusual formats: Snapchat was the first major app to sell both full- screen vertically oriented video ads and animated ads that can be overlaid on photos.
But the Los Angeles company has avoided banner ads and has limited the amount of data advertisers can use to pinpoint who sees which ads, hindering deals with many brands.
This deal could be a turning point, bringing Viacom’s help selling ads that run during videos produced by the media giant’s networks or by Snapchat.
“We believe we are a great fit,” Viacom Chairman and CEO Philippe Dauman told analysts on a conference call Tuesday morning. “I don’t want to toot our own horn, but they saw in us the most forward- looking ad- sales group out there.”
It’s also a significant digital move for Viacom, which is facing increased scrutiny from investors as cable subscribers and revenue sag.
Viacom’s shares plummeted Tuesday, falling more than 21 percent to close at $ 32.86 per share — a 52- week low — after reporting a 10 percent profit decline in its fiscal first quarter.
Dauman said the Snapchat deal “is indicative of the flexible and innovative approach” the company is taking to expand on a global scale.
Viacom has faced criticism for licensing shows to Netflix and other video providers, boosting those companies’ fortunes while fueling its own demise. But the media giant will double down on Snapchat.
Snapchat Discover, a feature on the app that promotes stories from about 20 media companies, will now have MTV and Comedy Central content worldwide. Previously, MTV was available everywhere but the U. S., and Comedy Central only in the U. S.
In addition, Snapchat will produce more Live Stories, curated batches of user- generated videos, that are tied to Viacom events such as the Video Music Awards and BET Awards. Last year, MTV drew 12 million users to a Live Story for the video awards, though only 5 million watched the main telecast.
“This deal between Viacom and Snapchat is a major step forward in the evolution of the marketplace,” Dauman said.
Viacom won’t be able to sell ads for Discover channels or Live Stories that are tied to other media companies or for Live Stories outside the United States.