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Factors That Impact Viacom’s Advertising Revenue

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Advertising revenue

Earlier in this series, we looked at Viacom’s (VIAB) advertising revenue and why it’s optimistic about the company’s advertising revenue in fiscal 2016. One of the reasons for Viacom’s optimism is that the company expects improved ratings from Nielsen.

In this part of the series, we’ll look at why Nielsen ratings are important for Viacom. We’ll also look at other factors that impact advertising revenue—scatter ad market and the impact of the reduction in ad loads.

Nielsen ratings are important for Viacom’s advertising revenue. Nielsen’s program ratings and other demographic information give advertisers an idea of the size of its target audience and its demographic.

Viacom’s major networks include Nickelodeon, Nick at Night, TV Land, BET, CMT, and VH1. They’re experiencing an improvement in Nielsen ratings for people across different age groups.

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Nielsen’s change in measurement service

In 2016, Nielsen is going to change the measurement service and move to an NTX Audience Universe. It will do total audience measurements. This change is expected to benefit Viacom.

Scatter ad market

Viacom expects to benefit from the scatter advertising market. It’s observing improved demand. It’s getting a good price for its scatter ad inventory. Six of the company’s top ten networks are exhibiting growth in sales of its scatter ad inventory.

Impact of reduction in ad loads

The company continues to see sequential improvement in its domestic advertising revenue in fiscal 2016 despite the reduction in ad loads due to high program ratings across its networks. Earlier this month, Viacom reduced the commercials at its networks including Comedy Central and MTV.

Viacom accounts for 0.33% of the PowerShares QQQ Trust Series 1 ETF (QQQ). QQQ also holds 12.6% of Apple (AAPL), 8.1% of Microsoft (MSFT), and 5.9% of Amazon (AMZN).

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