Viacom, Inc. (NASDAQ:VIAB) has secured a multi-year contract with social network, Snapchat to advertise on the platform.
A spokesperson from Viacom revealed that the deal will allow the firm to advertise against its own content on the social network. The contract will also enable ads on Snapchat’s “Live Stories” that collects posts from different geographical locations. The two firms announced that the multi-year deal that they agreed to will not include Snapchat ads from third parties just as many analysts had speculated.
The financial terms of the deal have also not been disclosed. The Wall Street Journal stated that Philippe Dauman, the CEO of Viacom would discuss the deal during the company’s earnings call on Tuesday. Viacom has a previous arrangement with Snapchat where the social network shows ads from Viacom’s networks such as MTV and Comedy Central. The contract will also allow the company to sell ads all over the world rather than just in the US.
The new contract is also expected to breathe more life into Viacom’s stock performance. The shares tanked by more than 20% after Tuesday’s announcement which indicated that the firm has been underperforming.
Snapchat will also include new channels to the Discover section as part of its deal with Viacom. These channels will give media firms an avenue where they can include their videos and stories. Some of the media stations that will receive these discover channels include MTV, Comedy Central, and Paramount Pictures. CNN and a few other Discover partners will also benefit.
The agreement was formed after meetings between Mr. Dauman from Viacom and Snapchat’s CEO, Evan Spiegel. The meetings were held in Los Angeles. The partnership will offer significant benefits to both firms, thus providing an attracting incentive for the direction that they have both chartered. Snapchat has an exponential growth curve, but its revenue is relatively challenged compared to the growth rate. The deal might be the social network’s chance to improve on the aspect of income.