Paramount Stock (NASDAQ:PARA) Dips, Main Ad Agency Fired

Entertainment giant Paramount (PARA) is doing some more cost cutting, reports note, as Paramount has fired its primary ad agency, WPP Media. The move was reportedly done in a bid to pare back costs ahead of the Skydance merger, and subsequent review of advertising operations. But shareholders were clearly not pleased, and sent shares down fractionally in the closing minutes of Wednesday’s trading.

Sources are unclear over who actually pulled the trigger that ended WPP Media’s involvement with Paramount, but the job has been done regardless, and WPP Media is out. That means a line of business wroth somewhere around $600 million is gone with it. WPP Media handled worldwide advertising for Paramount’s theatrical film releases, and also does international advertising for Paramount+. Horizon Media, meanwhile, handles that part of the operation in the United States, reports note.

Meanwhile, it is also unclear just how much Paramount will save by moving; after all, the job will still need to be done somewhere, and it is just as unclear who will be stepping in to take over for WPP Media in the time between now and whenever the Skydance merger actually concludes. Worse, reports also note that this could have been a huge mistake anyway, as Paramount’s executive brass was generally pleased with WPP Media’s work.

New Deal with LinkedIn

Then there was perhaps an even more unexpected development, as Paramount got together with Microsoft’s (MSFT) LinkedIn to improve business-to-business (B2B) advertising with Paramount’s streaming offerings. With the new arrangement, B2B advertising operations will be able to access Paramount, and even run campaigns “…served exclusively on a single publisher’s streaming portfolio with fixed pricing.”

Moreover, a new addition, Video Ad Serving Template (VAST) tags, will help improve advertising reach on these platforms, including connected television (CTV). Ultimately, reports noted, this will “…streamline delivery of high-quality assets across CTV screens.” It also should—as noted by ServiceNow’s Jonathan Wu—“…unlock…full-funnel performance with demand generation and lead generation at the same time.”

Is Paramount Stock a Good Buy Right Now?

Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on two Buys, eight Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 0.58% loss in its share price over the past year, the average PARA price target of $12.18 per share implies 2.01% upside potential.

See more PARA analyst ratings

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