Three Takeaways from the YouTube/NFL Streaming Deal

Three Takeaways from the YouTube/NFL Streaming Deal

YouTube

While all eyes were on Amazon’s streaming deal to broadcast NFL Thursday Night Football, YouTube waltzed in and pulled off an upset. YouTube signed a seven-year deal worth an average price of $2 billion a year to secure rights to the NFL Sunday Ticket franchise.

This is a big move for YouTube. Sunday Ticket is a subscription-only package that allows customers access to all Sunday afternoon games for out-of-market teams. DirecTV currently pays the NFL an average fee of $1.5 billion per season for both residential and commercial rights. Its deal expires after the current season.

Sunday games represent peak prime football. NFL Thursday Night Football (TNF), by contrast, typically features subpar games largely because the Thursday timing does not give teams enough time to prepare after their previous Sunday games. Amazon’s ratings for TNF broadcasts have been spotty although four games rank among the Top 100 most viewed telecasts of 2022 according to Nielsen.

YouTube reportedly bested Amazon, Apple, and ESPN to secure the rights. YouTube will offer Sunday Ticket as an add-on to YouTube TV (a subscription streaming service that lets you watch live TV from major broadcast and popular cable networks) and in the video platform’s main app through a service called Primetime Channels that allows viewers to subscribe to individual channels.

Here are some takeaways from the agreement:

  • The deal is another sign that connected TV (CTV) is the future. For the first time, streaming viewership topped cable in 2022, and this trend is not going to reverse course as cord cutting continues. As reported in Axios recently, traditional television companies and major media firms are bracing for further declines in the ad market and yet another increase in cord-cutting this year. “The migration of the country’s biggest sports rights packages from linear TV networks to streaming will expedite the inevitable collapse of the cable bundle,” Axios noted. At True Interactive, we believe it’s important that businesses understand the growth of advertising on streaming platforms in context of the rise of connected TV. If you’ve not done so already, take a closer look at why connected TV is growing and how it could expand your audience. (True Interactive can help you with that.) Connected TV is enjoying 60-percent growth, driven by a public’s appetite for streaming that continues unabated. Connected advertising is similar to linear TV advertising because both formats rely obviously on video. But connected TV is different in many important ways. For one thing, advertisers need to understand how to create video content that will reach viewers across a variety of viewing devices in addition to TV screens, and connected TV ads are competing with multiple content streams. You can watch Amazon’s TNF on a laptop, mobile phone, or gaming console with multiple screens open. The same will hold true for watching NFL Sunday Ticket via YouTube TV. YouTube offers a number of connected TV ad units including its Masthead ad format. YouTube has added more CTV formats recently and will certainly offer more as its competitors such as Amazon do the same.

  • This a victory for first-party data, which is the information that businesses collect directly from their customers. YouTube will use first-party data to sell targeted ads to help drive revenue for the games. Right now, third-party audience data is withering away thanks to Apple’s and Google’s privacy measures. Businesses that figure out how to monetize first-party data enjoy an enormous advantage. YouTube is the second-most popular search platform in the world (behind Google). The company will be well positioned to us first-party data to sell targeted ads to NFL viewers.

The 2023-24 NFL season seems a long way off. YouTube still needs to deliver on investor expectations for parent company Alphabet between now and then. Look for YouTube to expand even more into the lucrative live sports field, which is still up for grabs among streaming platforms. Meanwhile, Alphabet’s next earnings announcement is February 7, 2023. Let’s see how YouTube’s advertising revenue delivers.

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Advertiser Q&A: Connected TV

Advertiser Q&A: Connected TV

Advertising

As we blogged in 2019, we are living in a connected TV (CTV) era, one in which audiences are fragmented, consuming content across multiple devices and channels. CTV provides brands with tremendous opportunity, but some confusion persists about what it is exactly. Read on to learn more about CTV, how it differs from over-the-top (OTT) TV, and how it might benefit your brand:

What exactly is connected TV?

Connected TV refers specifically to the device used to access content (e.g., devices such as Amazon Fire, Roku, and Apple TV, not to mention gaming consoles like Xbox). Andison Flores at LiftIntent explains, “CTV is anything that allows your TV to access video content through the public Internet, as opposed to traditional cable.”

Is connected TV the same as OTT?

Though CTV and OTT are often used interchangeably by marketers, brands, and even reporters, there is a distinction. As Tal Chalozin, Co-founder and CTO at Innovid, says, “OTT means you are accessing content ‘over the top’ of infrastructure providers.” For example, users might be purchasing bandwidth from a provider like Comcast. But they can go “over the top” of Comcast by buying additional content—subscribing to Hulu, say, or Netflix. Chalozin explains, “You’re using the bandwidth provider as an access layer but not as the main way you’re accessing content.” In short, OTT refers to the new breed of content providers.

The Interactive Advertising Bureau (IAB) makes a handy comparison:

  1. “Use CTV when you are specifically talking about Smart TVs and streaming devices that are attached to TVs. Mobile and desktop devices are not included under the term CTV.
  1. Use OTT when it doesn’t matter which devices are included. For example, if you want to talk about ‘OTT services’ (like Hulu or TubiTV), and delivery to a particular device doesn’t matter. OTT is still a valid term that distinguishes premium television content from the vast world of online video where user-generated content is commonplace.”

Why is connected TV getting popular with viewers?

As Anna Kuzmenko, COO at BidMind by Fiksu, notes, CTV offers users the freedom to “watch whatever they want, whenever they want.” Millennials and Gen Zers in particular have “cut the cord,” eschewing the limits of linear TV viewing in favor of streaming.

Why is connected TV popular with advertisers?

Advertisers are following their audience. According to Forbes, a recent study from the Leichtman Research Group estimates that 80 percent of TV homes in the U.S. have at least one connected TV device. That number represents a steady increase from the 57 percent logged in 2015, and 24 percent in 2010.

Predictably, CTV use soared during the pandemic: Forbes also cites a Nielson report, which notes that CTV viewing exploded from 2.7 billion hours during the pre-pandemic week of March 2, to 3.9 billion hours during the weeks of March 23, March 30, and April 6. Even during the week of May 4, when stay-at-home laws eased in some states, CTV viewing remained above pre-pandemic levels at 3.5 billion hours.

These stats are good news for advertisers embracing CTV. So is the fact that CTV allows brands to reach out to specific audiences. As Forbes notes, “CTV’s targeting capabilities are the ‘holy grail’ for advertisers.” Many CTV companies use ACR, or Automated Content Recognition, which collects data that can inform programming recommendations for users and better target ads to niche groups. Although audiences in the era of connected TV may not be as huge as the linear TV days, CTV helps brands better understand and reach their niche market effectively.

And the future of CTV looks bright. Kuzmenko says, “In 2021, CTV ad spend is estimated to hit the significant sum of $10.81 billion.”

How do you set up a connected TV campaign?

The approach for now is very passive: you give a connected TV provider such as Verizon Media/Yahoo the desired demographic you want to reach, and Verizon Media/Yahoo tells you what the CPM (cost per thousand impressions) will be. Verizon Media/Yahoo manages the rest.

Note: different providers have different requirements. With Verizon Media/Yahoo, for example, you can dive in with any budget, but a $20 CPM is minimum if you want to get a reasonable amount of impressions. And as might be expected, the more targeting that you do—narrowing your demographic by city, say—the more expensive advertising is going to be.

What metrics can connected TV providers give you?

It varies. iHeart Media gives you impressions, cost, CPM and completion rates as well as some demographic results with similar KPIs. Verizon Media/Yahoo gives you impressions.

Additionally Verizon Media/Yahoo can include conversions as well based on users’ IP address, Yahoo mail receipts, and other proprietary data/tools.

Contact True Interactive

Eager to capitalize on the opportunities CTV can offer your brand? Contact us. We can help.

Photo by Li Lin on Unsplash