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Facebook, YouTube, EA seen getting ‘modest boost in the arm’ from World Cup mania: Baird

Qatar Looks To 2022 FIFA World Cup

Sean Gallup

The 2022 World Cup started on Sunday, with host nation Qatar losing against Ecuador 2-0 in the opening match. While the month-long event is sure to impact the lives of hundreds of millions of soccer fans around the world, investment firm Baird believes that a few companies may also see a boost.

Analyst Colin Sebastian, who thinks Argentina will take home the gold trophy as the tournament’s winner, said potential beneficiaries of the tournament include those in social media, notably Meta Platforms’ (NASDAQ:META) Instagram, Twitter (TWTR) and ByteDance’s (BDNCE) TikTok, due to increased engagement.

Other beneficiaries include video game maker Electronic Arts (NASDAQ:EA), streaming platforms, such as Google’s (NASDAQ:GOOG) (NASDAQ:GOOGL) YouTube and online sellers of sports gear.

“Despite some controversies surrounding the games, we believe the event could increase time spent and usage of mobile apps with game highlights, online betting, and soccer video games,” Sebastian wrote in a note to investors.

The digital advertising space could see a “modest positive impact,” Sebastian noted, as more than 3.6B people watched the 2018 World Cup, including 1.12B viewers of the final, or more than five times the number of people who watched the 2022 Super Bowl.

He also noted that there is likely to be an increase mix of TV viewing on streaming platforms, including Google’s (GOOG) (GOOGL) YouTube TV, noting that Twitter (TWTR) also benefited from the 2018 World Cup, seeing 115B impressions an additional $30M in ad revenue.

“Overall, we expect a modest boost to video advertising over the month, considering as well the added competition during the seasonal holiday shopping period,” Sebastian explained.

In the U.S., the television rights to the 2022 World Cup will be broadcast by Fox Corp. (FOXA) and Comcast’s (CMCSA) Telemundo.

Sebastian also noted that Electronic Arts (EA) could benefit from higher engagement levels during the 29-day tournament, as it modified its World Cup content to contribute to monetization in FIFA 22.

For online selling platforms, such as Amazon (AMZN), Alibaba (BABA) and others, there is likely to be a “minimal impact,” Sebastian noted.

The analyst added that while certain matches, such as the U.S. versus England on November 26, could be a temporary distraction from shopping, there isn’t likely to be a “meaningful impact” on overall holiday spending with one exception: sporting goods and sports apparel for countries winning key matches.

Last week, UBS named Meta Platforms (META) among its top ideas for 2023, noting it is “taking steps to be more capital efficient, including reducing headcount.”

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