February 20, 2024

Written by Tim Colucci

The Connected TV Advertising Opportunity for Live Sports

While millions of Americans were hunkered down in their homes during a cold snap on January 13, television history was being made. For the first time, an NFL playoff game was aired exclusively on a streaming service, NBC Universal’s Peacock. Restricting a playoff game to a streaming platform caused a stir among sports fans, who were accustomed to playoff games being given maximum exposure on linear TV. But by the time viewership number were in, Peacock and the NFL had reason to smile amid the backlash. The game was the most streamed live event ever in the United States. The moment was also indicative of something bigger: the transition of live sports to connected TV. With that transition comes advertising opportunities.

The Live Sports Connected TV Landscape

I mentioned recently in True Interactive’s 2024 predictions blog post that connected TV advertising will explode this year as television viewers continue to cut the cord and move from linear TV to connected TV. This shift has affected how people watch live sports. One thing has not changed: advertisers are following viewers. Approximately 39 percent of viewers mainly consume sports content through ad-supported CTV platforms or social media, the same number as those who use cable for their sports viewing. Amid this shift, streaming platforms and sports leagues are falling all over themselves to go to market together with live sports. Consider:

  • The NFL airs on several streaming services, including Peacock, Amazon Prime, Paramount+, and YouTube. Amazon Prime streams Thursday Night Football as a Black Friday football game, which made its debut in 2023. Soon, Amazon Prime will air an NFL playoff game.
  • Major League Baseball has granted Apple TV+ exclusive rights to Friday Night Baseball doubleheaders as well as a slate of programming on platforms ranging from YouTube to Hulu.
  • Similarly, the NBA and NHL have agreements with myriad streaming platforms such as MAX and the FAST streaming services.

In fact, there are so many streaming platforms airing live sports that you need a scorecard to keep track of them. And here’s the kicker: the majority of users (56 percent) prefer lower-cost streaming options with ads.

Why Live Sports Advertising Is Appealing

Clearly, there is a market for live sports advertising on connected TV, and benefits for advertisers, such as:

  • Targeted advertising: CTV platforms allow advertisers to use data-driven strategies to target specific demographics, interests, and viewing habits. This means ads during live sports can be tailored to reach audiences who more likely to be interested in the product or service, leading to higher engagement rates.
  • Increased engagement: sports fans are highly engaged viewers, especially during live events. Advertising during these events means that ads are likely to be seen by viewers who are actively watching and engaged with the content, reducing the chances of ads being skipped or ignored.
  • High reach: live sports events are among the most watched programs in linear television, attracting large audiences – and so far, connected TV is no different. Advertising during these events can significantly increase brand visibility and reach a wide and diverse audience.
  • Multi-screen engagement: CTV users often use multiple screens while watching content, such as smartphones and tablets. This opens opportunities for integrated advertising campaigns that can engage viewers across different devices, increasing the potential touchpoints with the audience.
  • Measurable outcomes: With CTV, advertisers can access detailed analytics and performance metrics, such as view-through rates, engagement levels, and conversion rates. This data allows for more precise measurement of ad campaign effectiveness compared to traditional TV advertising.
  • Flexibility and innovation: Advertising on CTV platforms offers flexibility in ad formats and lengths, including interactive and immersive ad experiences that are not possible with traditional TV. Advertisers can experiment with innovative formats to captivate the audience, such as interactive polls or augmented reality experiences.
  • Cost efficiency: While advertising during live sports can be expensive on traditional TV, CTV platforms may offer more cost-effective options with the ability to target ads more precisely, potentially leading to a higher return on investment.

Caveats to Consider with Connected TV Advertising

While advertising on live sports events on CTV offers numerous benefits, there are also several caveats to consider:

  • High cost: advertising during live sports events can be significantly more expensive than other times due to the high demand for these premium slots – which is true for CTV and linear. The cost may be prohibitive for smaller brands or those with limited advertising budgets, potentially leading to a lower return on investment.
  • Ad skipping and ad blocking: While CTV offers advanced targeting capabilities, viewers have more control over their viewing experience, including the ability to skip ads or use ad blockers on certain platforms. This can reduce the overall effectiveness of ad campaigns.
  • Fragmented audience: The audience for live sports on CTV is more fragmented across different platforms and services compared to traditional broadcast TV. This fragmentation can make it challenging to reach a comprehensive audience and require advertisers to run campaigns across multiple platforms, increasing complexity and costs.
  • Limited inventory: the high demand for advertising slots during live sports events can lead to limited inventory, making it difficult for all interested advertisers to secure their preferred spots. This scarcity can drive up costs and limit opportunities for exposure.
  • Viewer distraction: Even though live sports events can attract highly engaged audiences, the multi-screen behavior common among CTV viewers can lead to distractions. Viewers may divide their attention between the game and other devices, potentially diminishing the impact of advertisements.
  • Complex measurement and attribution: While CTV advertising provides advanced analytics, accurately measuring the effectiveness of ad campaigns and attributing conversions can still be complex. Challenges in cross-platform measurement and attributing sales or conversions directly to CTV ads can make it difficult to assess ROI.

The Amazon Example

Despite these challenges, many advertisers find that the benefits of advertising on live sports events on CTV outweigh the drawbacks, particularly for brands looking to capitalize on the highly engaged and targeted audiences that these events attract. What’s especially appealing are the variety of ad formats available. Let’s look at Amazon Prime for examples in context of the Amazon/NFL Thursday Night Football (TNF) game, aired weekly during the season.

For context, TNF viewers are 34 percent more likely to shop for brands and products advertised during TNF (compared to viewers of ads on competitive networks during prime-time NFL games in the previous week). To reach those viewers, Amazon has rolled out several ad formats, including:

  • Direct-response advertising. Amazon injects commerce into the game-watching experience. Amazon already offers deals for Amazon Prime customers associated with TNF, and Amazon really ramped up shopping deals during the 2023 Black Friday game (including limited time deals along with plenty of shoppable ads).
  • Audience-based creative that presents advertisers with an opportunity to categorize NFL viewers into distinct groups, enhancing ad relevance. Advertisers can customize their messaging for each group, using geographic, demographic, and behavioral data. For instance, a car manufacturer might target a younger adult demographic with a sports car commercial, appeal to sports and outdoor enthusiasts with an SUV advertisement, and broadcast a general brand message to the wider TNF audience, all within the same 30-second ad slot.
  • More ways for fans to interact with an ad without leaving their TNF stream. Interactive video ads include clickable ad formats on Fire TV devices. Fire TV viewers can click a “Send to Phone” or “Send to Email” button with their remote, triggering a push notification or email that links directly to the brand’s Amazon store or product page.

The ESPN Example

To be sure, Amazon isn’t the only provider of ad formats, but I think Amazon has really been innovating. Just to give you a sense of the wide range of ad formats available, here are ESPN’s:

  • Leaderboard Banner: this classic ad format is prominently displayed throughout various sections of the app.
  • Collaboration ad (HTML5): an adaptable ad that blends into the app’s design. Choose from article, video, or image-based formats.
  • Premium content ad: uses dynamic ESPN content alongside your brand message. Options include News & Notes, Video Content, and Local Integrator, complete with social sharing features.
  • In-content ads: standard rectangular ads supporting HTML5 placed strategically within the app’s content.
  • Vertical display: a full-screen ad experience integrated directly into the app’s flow.
  • Vertical shoppable (image or video): interactive ads highlighting products, allowing users to instantly jump to purchase points.
  • Vertical video & vertical video + carousel: video ads built by ESPN. Short, muted video previews entice users to unmute for the full 30-second experience. The “+ Carousel” version offers additional images and text.

Source: ESPN media kit.

Tips for Success

The fundamental principles for successful live sports advertising on linear TV apply to connected TV, such as understanding your audience, choosing the right sports event for your brand, creating engaging and relevant ads, and measuring performance. In addition, I suggest these tips specific to CTV:

  • Embrace advanced targeting features: take advantage of CTV’s targeting capabilities by using data such as viewing history, geographic location, and device type to deliver your ads to the most relevant audience segments. This precision targeting helps in optimizing your ad spend and increasing ROI.
  • Use Interactive ad features: CTV platforms often support interactive ad features, such as clickable ads or QR codes. These features can significantly enhance viewer engagement by offering a direct call-to-action, such as visiting a website or signing up for a newsletter.
  • Maximize the value of your ad by synching it with your brand’s messaging across the entire purchasing funnel before, during, and after the event: get the most out of your ad budget by syncing the creative you run during the event with multiple ad placements that reinforce the message you shared when you had your audience’s attention throughout the event. For more insight, read my blog post about achieving digital parity with Super Bowl ads.
  • Plan for cross-platform campaigns: as noted, sports viewers often use multiple devices simultaneously. Design cross-platform campaigns that can engage viewers on their smartphones or tablets while they watch the game on CTV, creating a cohesive multi-channel experience.
  • Test and optimize: start with smaller campaigns to test different strategies, creatives, and targeting options. Use CTV’s analytics to measure performance and optimize your campaigns based on real-time data. Continuous testing and optimization are key to finding what works best for your brand.

Whatever you do, don’t ignore CTV. Even if live sports is not appealing to you, its skyrocketing popularity on CTV should be a pretty strong signal where all audiences are headed. Live sports used to be the exclusive domain of linear TV. CTV is catching up quickly.

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