While things may not be looking great for over-the-air television right now, it is still a thing, and it still makes at least some money from advertising sales. Understanding ad performance, therefore, is vital to making sales. And entertainment giant Warner Bros. Discovery (WBD) recently set up a new deal with VideoAmp to better determine how well advertising does. Investors took the news very well, and sent shares up over 2% in the closing minutes of Thursday’s trading.
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The deal between Warner and VideoAmp is set to run several years, and will give Warner access to VideoAmp’s data and measurement tools. The data and measurements produced therein, meanwhile, will be used in the 2025 Upfront and beyond from there.
Warner’s head of ad sales research, data and insights, David Porter, noted “VideoAmp helps us measure what actually works—across every screen, every audience, and every dollar spent—which will be more important as the industry gears up for the next TV buying season.” For its part, VideoAmp noted that its technology helps deliver “three-times more targetable ID for third-party content.” VideoAmp also noted that using its systems delivers “…an average 14% incremental digital reach lift,” which means quite a bit more viewers getting reached with them than without.
Cramer Vs. Warner
Meanwhile, the upcoming split-off between Warner and its linear television operations is drawing fire from an unlikely source: market analyst Jim Cramer. Cramer apparently does not care for the direction the split is taking, noting that the company that takes the cable channels “…would not be that great a company…”
Though there are some advantages to such a strategy—Cramer calls particular attention to the debt load and how now it will be “…taken care of…”—Cramer does seem convinced that the television part of Warner is, essentially, a dead man walking. This is a viewpoint many seem to share.
Is WBD Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on 10 Buys and eight Holds assigned in the past three months, as indicated by the graphic below. After a 66.58% rally in its share price over the past year, the average WBD price target of $13 per share implies 3.85% downside risk.
