Snap and NBCUniversal Sign Ad Deal for 2018 Winter Olympics
Exclusive Olympic content
According to a March 2017 Wall Street Journal report, Snap (SNAP) and NBCUniversal, a unit of Comcast (CMCSA), signed an advertising deal focused on the 2018 Winter Olympics. As part of the deal, Snapchat would carry exclusive Olympic content co-produced by BuzzFeed and NBC—a sweeter deal than the Olympic content arrangement that NBC has with Facebook (FB) and Alphabet’s (GOOGL) YouTube.
The report added that the advertising deal between Snap and NBC could be worth up to $75.0 million. The latest pact builds on the partnership the companies struck for the 2016 Summer Olympics in Rio de Janeiro.
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According to Gary Zenkel, president of NBC Olympics, the Rio Olympic videos that NBC shared on Snapchat reached ~35.0 million viewers in the US (SPY). The majority of the audience was under the age of 35, a coveted customer base for marketers.
Can Snap prove skeptics wrong?
The Winter Olympics deal with NBC provides Snap with a rare opportunity to prove its worth to marketers and investors. As Facebook (FB) has continued to copy key Snapchat features, some marketers and investors have recently grown skeptical of the smaller company’s prospects. However, online ad spending continues to increase, as shown in the chart above.
Impact of Winter Olympics on subscriber growth
Carrying Olympics content allows Snap to demonstrate to marketers the value of advertising on its platform. If this effort is successful, marketers could spend more on Snapchat ads.
Additionally, the exclusive Olympics video arrangement offers Snap an opportunity to attract users with content they can’t find anywhere else. Investors, in particular, should be looking to see how the Olympics deal helps Snap grow its revenues and subscriber metrics.