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Why Did Comcast Acquire StickyAds.tv?

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Comcast’s acquisition of StickyAds.tv

Comcast continues to enhance its ad technology in order to grow its advertising business. Early this month, Re/code reported that Comcast (CMCSA) had acquired StickyAds.tv, a French advertising video technology startup that delivers ads on digital properties. StickyAds.tv will be a part of Comcast’s FreeWheel, which helps media companies including Viacom (VIAB) and 21st Century Fox (FOXA) deliver digital video advertising. According to a Business Insider report citing an unnamed source, the deal was closed for $100 million.

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StickyAds.tv is a supply-side platform that offers programmatic ad buying. Programmatic ads are the technological framework for conducting automatic real-time auctions of display ads. StickyAds.tv will also let publishers “create their own supply-side platforms,” essentially private ad exchanges that allow publishers to give certain buyers the ability to purchase their inventory via programmatic tools.

Reasoning behind acquisition of StickyAds.tv

The acquisition indicates Comcast’s growing focus on advertising. As the chart above indicates, in 1Q16, Comcast had advertising revenues of $2.7 billion across all its business segments, a slight decline of 7% compared to 1Q15. Advertising comprised 61.2%, or $1.3 billion, of Comcast NBCUniversal’s Broadcast Television revenues of $2.1 billion in 1Q16.

Comcast is also increasingly investing in digital properties as indicated by the company’s recent investment of $200 million in Vox Media and a $250 million investment in Groupon (GRPN) through Comcast’s venture capital company, Atairos. Comcast’s acquisition of StickyAds.tv could also help it leverage StickyAds.tv’s supply-side platform across its digital properties.

Comcast makes up 0.83% of the SPDR S&P 500 ETF (SPY). SPY invests 3.4% of its holdings in the computer sector.

In the next part of this series, we’ll discuss why Comcast and other companies are jumping on the programmatic ad market bandwagon.

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