‘There is so much content competing:’ As live sports returns, advertisers grapple with a congested window

UK publishers

After seeing the coronavirus temporarily shut all major sporting events like the Premier League and the NBA, and stop marketing via sport in its tracks this spring, advertisers eager to get back in the game and regain lucrative audience segments, may soon be faced with too much of a good thing. 

From the return of the Premier League football matches later this week to the amended NBA tournament next month, a new NFL season and the prospect of compressed Major League Baseball season with extended playoffs, there’s going to be an unprecedented wave of tentpole sports events on TV over a shorter period of time. This deluge of fresh live content comes amid a slew of repeats and quick-turnaround productions that look like Zoom meetings more than professional productions. 

“Not only does this increase the reach of live sports content, but it also creates new advertising slots, options for new formats and potential brand exposure,” said Gareth Capon, CEO at video tech platform Grabyo. “For example, one of the first major football leagues to restart was the K League, which broadcast its season opener live to Twitter and YouTube in May, achieving over 3.5 million views across both platforms. While in Germany, the resumption of the Bundesliga broke TV audience records for Sky, as over six million fans tuned in to watch various games live.”

A possible drawback of all these sports trying to complete schedules as soon as practically possible is a bottleneck of events over the summer and into the fall. That could splinter the TV sports audience and subsequently spread media dollars too thin. 

“Live sports as a whole will drive a significant share of the audience once it returns, but that could split sideways in a lot of ways because there’s so much content competing against each other,” said Jeff Gagne, svp of strategic investments at Havas Media. 

In the U.K. this logjam of sports, from the restarted Spanish and German football leagues to upcoming European golf and Formula One events could even eat into what was thought to be untouchable media money reserved for the return of the Premier League on Wednesday. 

Advertisers know those matches are likely to have a hugely inflated audience after so long away from screens but are wary of how long that will last. After all, the league could be decided within a week of its return and there are only a handful of marquee match-ups left on the fixtures list. It’s little wonder then why some advertisers remain cautious over committing large sums of money to broadcasters of the league when there are other major sports on the calendar including Formula One, PGA European Tour and the NBA happening at the same time.

“The natural pattern of football tournaments at this time of year is that there will be high viewing figures to start off with and then the audience and the demand will start to settle,” said Simon Bevan, chief investment officer at Havas Media Group. “That could happen with the current season, particularly if Liverpool go on to win it early on in the schedule. The broadcasters are trying to work out how to maximize their yield in a short period of time.”

To allay those concerns, Sky is letting advertisers buy in-game inventory for most of the 64 games it will broadcast at a fixed price safe in the knowledge that fees won’t inflate if audiences do. Normally, the fees for those matches would have been priced against ITV’s ad rates.

“We felt that offering a fixed price hedges versus the likely ITV inflation on male buying demographics — as those audiences will probably choose to watch the football over other content,” said a Sky spokesperson in an emailed statement. “This gives advertisers more certainty of the price or cost of football and prevents us from having to pass on possible inflation unnecessarily.”

Still, some advertisers remain skeptical over whether they really benefit from a fixed fee in the uncertain economic climate. Based on Sky’s estimates to media buyers, advertisers will need to fork out £170 ($212) per cost-per-thousand to reach 16- to 34-year-olds, said one agency trading director who has met with the broadcaster’s commercial execs. Currently, the average CPM is around £138 ($172), meaning Sky expects the return of the Premier League to have as much as a 20% shift on the cost of TV ads. 

“There’s still a lot of uncertainty in the U.K. where you have government warning about business bankruptcies toward the end of the quarter,” said James Elliott, head of audio and visual media at Bountiful Cow. “As a result, advertisers are still cautious about what TV content they buy because it requires significant budgets to make it work.”

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The same could be said of media deals for the upcoming NFL season. 

From when it will start to whether owners and players will cooperate on revised financial deals, advertisers are wary of committing dollars even though summer is traditionally when those media dollars are locked in for the fall, according to four media buyers interviewed for this article. And not when there are other, potentially cheaper, sports they could pick. 

“Nothing tends to do well against the NFL, but its never had so much competition from other sports before in a market where the price [of commitments] is having such a huge impact on decisions,” said Gagne. 

With more money spent across more sport, it could lead to a situation where broadcasters don’t have enough inventory. 

“A lot of the inventory that was sold for the regular season and playoffs is still in play as there were many advertisers that decided to pause campaigns,” said Adam Schwartz, svp of sports media at Horizon Media. “That money is going to have to be squeezed into a truncated season and if it can’t then the networks are going to have to give money back to advertisers. The broadcasters are going to have to try and figure out ways to retain as much of that money as possible.”

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