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Comcast Signs Multiyear Advanced Advertising Pact with Viacom

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May. 11 2018, Updated 8:02 a.m. ET

Delivering more relevant ads to television audience

Comcast (CMCSA) and Viacom (VIA) (VIAB) recently entered a multiyear agreement to expand their cooperation in the area of advanced advertising, which involves targeting commercials at the household level.

The deal involves Comcast contributing technology and data while Viacom brings national reach and expertise to deliver better ad targeting. The partnership is expected to make it easier for Viacom to know who is watching its shows, allowing it to deliver more relevant advertisements to the audience.

Comcast and Viacom are part of a consortium known as OpenAP, which is an advanced audience platform. Time Warner (TWX) and 21st Century Fox (FOX)(FOXA) are also members of the OpenAP consortium.

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Ad revenues declined 8.8% at Comcast

Viacom is looking to take advantage of the data and tools developed by Comcast’s FreeWheel unit. These tools would provide better ad targeting to audiences viewing traditional television as well as subscribers to online video services.

FreeWheel is the umbrella brand of Comcast’s advanced advertising business. Comcast acquired FreeWheel in 2014. Until the end of 2017, Comcast’s revenues were up more than 22.8% since 2014. However, Comcast’s advertising sales dipped in 2017, dragged down by low political ad spending. Advertising revenues dropped 8.8% to ~$2.3 billion. The chart above illustrates Comcast’s annual revenue trend.

Viacom building advanced advertising alliance

Comcast is just one of Viacom’s advanced advertising partners. Last year, Viacom inked advanced advertising deals with its programming partners Charter Communications (CHTR) and Altice USA (ATUS).

Viacom’s revenues rose ~6.5% to $13.3 billion in the fiscal year ended September 2017.

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