Viacom touted its new Advanced Marketing Solutions (AMS) platform during the company’s quarterly earnings call. The new solution, designed to help Viacom earn more revenue from emerging advertising platforms, saw revenue growth of 33% year-over-year, the company said.
After acquiring marketing agency WhoSay, Viacom added marketing services to its advertising offerings ahead of the TV upfronts earlier this year, in an attempt to bolster its advertising revenue. Viacom has seen its advertising revenue decline year-over-year as ratings across its linear cable TV channels have suffered. Viacom was one of the first cable programmers to offer targeted advertising solutions beyond Nielsen demos to counter dropping CPMs as younger viewers pivoted away from linear TV.
Viacom is now offering brand solutions ranging from consulting, creative and social campaign services, alongside its addressable video inventory, in what the company has described as a “complete marketing solutions approach.”
It looks like the strategy is beginning to pay off. According to Jefferies analysis, Viacom’s upfront CPMs increased around 7% this year.
“We drove our strongest upfront in five years, with mid-to-high single-digit growth across all our cable networks,” Viacom CEO Bob Bakish said in the company’s quarterly earnings call, attributing that growth to AMS.
Viacom’s AMS business is expected to generate $300 million in revenue 2018. According to Viacom EVP and CFO Wade Davis, the business is growing roughly 40% quarter-over-quarter.
“We think that rate of growth will carry into 2019, and actually in the first part of 2019 accelerate,” Davis said at the Gabelli Movie & Entertainment Conference earlier this year.
Viacom also recently announced that Fox has become its first media partner to license the AMS Vantage engine, which powers Viacom’s targeting advertising offerings. Fox will use the solution for linear optimization across its networks.
“This is a powerful validation of our leadership in the space,” Bakish said during the earnings call. “And as we work to secure additional licensing partnerships with publishers, we’re excited by the potential of this new business to accelerate the ecosystem and evolve into an incremental revenue stream.”
“It’s really changing the dynamics of our domestic ad sales business,” Davis said.
Overall, Viacom reported ad revenue had dropped 3% year-over-year during Q3, but the company expects advertising revenue to pick up in 2019.
“Looking forward, we see continued momentum as we pivot from stabilization and revitalization of our business to a new phase of growth,” Bakish said.