NFL Remains Top Draw For Advertisers
Advertisers of all sizes are continuing to pull money out of traditional linear primetime entertainment television and move it into assorted live sports — primarily into the National Football League this fall.
With the actors and writers strikes shutting down the production of entertainment TV programming since May, the NFL has continued to solidify itself as the most desired place for advertisers to be on television.
Seller And Buyer Praise
“The NFL offers large, live audiences that are fully engaged and that’s exactly what marketers are looking for,” says John Bogusz, EVP, advertising, CBS Sports.
“The NFL stands alone above all of TV programming,” says Mark Evans, EVP of ad sales at Fox Sports. “It is what every marketer is looking for.”
And if you don’t believe the network executives’ hype, media agency execs feel the same way.
“The NFL is one of the last places to garner eyeballs on television in a mass way,” says Martin Blich, executive director of sports and live investment at GroupM. “We are seeing a continued shift in ad dollars across the entire sports landscape. The only question is where does it cap out.”
Not only are the big $100 million a season or more advertisers back, but smaller advertisers, many for the first time, are jumping into the NFL this fall.
“We are seeing more new and lesser spending advertisers buying NFL ad time,” Evans says, noting this includes both mid-range and entry level spenders.
Evans says a number of new Fox NFL advertisers bought ad packages in the $25 million-$30 million range, while some others are getting their feet wet with selective ads totaling $2.5 million to $5 million.
“Every marketer is learning how to engage in the NFL and new advertisers are learning how to advertise in sports because they have to,” adds GroupM’s Blich.
Saving The Upfront
This fall’s upfront selling season would have seen considerably less advertiser dollar commitments than it did if it weren’t for the ability of the networks to use the NFL as motivation to sell ad packages by encompassing it with all other lesser viewed linear programming.
Media agency projections estimate that overall linear TV ad dollars committed to in this year’s upfront were down around 10% but that percentage was kept from being higher due to the influx of NFL ad spending.
“We recommended our clients move their ad dollars out of primetime entertainment and into sports — and particularly into the NFL,” says one media agency buyer.
“That strategy made sense even prior to the writers’ and actors’ strikes, but more so after they started and the upfront buying season began,” the agency exec says.
Another media buyer adds: “The agencies wound up having more money left than they thought they would as they did each package deal, so we used some of those extra dollars to increase our NFL buys.”
The lack of new first-run entertainment programming available during the upfront buying period considerably slowed down negotiations since many advertisers and their agencies were hesitant to buy large packages.
And that made it somewhat of a buyers’ rather than sellers’ market and somewhat negatively impacted NFL ad pricing and the speed of which advertisers could buy it up.
“Last year our NFL upfront buying was completely done by mid-May. This year it extended into mid-July,” one buyer says.
Despite not being able to charge max rate hikes, NFL advertising overall still grew its cost-per-thousand pricing, with the networks cumulatively getting CPM increases in the 5% to 7% range compared to 7%-10% last season.
And despite all the posturing and longer negotiations, when upfront selling was finally completed, most of the networks had reached their NFL sales goals.
“The upfront was a longer process than usual, but it was really successful for us,” says Peter Lazarus, EVP of sports ad sales at NBC. “From a sports perspective we are happy where we leveled out at.”
Lazarus says not only has NBC sold around 90% of its NFL advertising heading into the season, but the network also increased its ad revenue take in other sports.
NBC has added over 20 new NFL advertisers at different spending levels for the upcoming season, Lazarus says. Meanwhile, NBC and Peacock will be televising Big 10 college football games for the first time, with close to 50 advertisers on board for the initial season of telecasts.
“Sports ad buying momentum continued regardless of the strikes,” Lazarus says. “Demand was as high as it’s ever been for the NBC Sunday Night Football telecasts, and we renewed all of our major sponsorship positions.”
Lazurus says Sunday Night Football was able to get double-digit CPM increases because it is the most watched show on linear primetime television.
In addition, its Football Night in America and pre-kickoff show from 8 p.m. to 8:23 p.m. on Sunday nights averaged 12.2 million viewers last year, making it the third most watched linear TV primetime program behind SNF and ESPN’s Monday Night Football.
“The NFL is the cornerstone of our fall lineup,” Lazarus says. “It’s the No. 1 show on television. It allows us to promote our entire programming schedule for the network. And it builds ratings year after year and brings in new advertisers on an annual basis.”
ESPN And ABC’s Inventory
Jim Minnich, VP of revenue and yield management for sports at Disney Advertising Sales, says for the upcoming NFL season “advertiser renewal rate was high, we signed some new multiyear deals and some new sponsorship positions.”
In addition to NFL games on Monday night this season, ABC, ESPN2 and ESPN+ will also be televising games, along with the Manningcast simulcast across all platforms.
Minnich says not only was pricing up, but overall NFL dollar volume was up, helped by a new divisional round playoff game added to the ESPN schedule, and a streaming game on ESPN+.
“We had more NFL inventory to sell, and we did,” Minnich says, adding that heading into the NFL regular season north of 80% of all NFL ad inventory avails are sold, similar to the level heading into last season.
And Minnich says ESPN’s opening game on Monday, Sept. 11, with the Buffalo Bills vs. New York Jets is sold out.
Minnich says its MNF Countdown show has a new sponsor, Panera, which replaces Subway. He also says Jersey Mike’s has bought an in-game ad package and will sponsor a feature on the MNF kickoff show.
And Allstate has signed a season-long sponsorship of the Domonique Foxworth ESPN NFL digital show.
Evans says Fox sold about 85% of its NFL ad inventory during the upfront and resisted selling anymore because if the writers and actors strikes continue the price of remaining NFL scatter ads could skyrocket.
“Scatter market demand is already beginning much earlier than usual,” Evans says, “and a lot of those advertisers are in more non-traditional NFL ad categories like consumer-packaged goods.”
That’s clearly an indication that advertisers do not believe first-run scripted entertainment programming will be ready to air in the near future, and they want to lock in their ad dollars on a sure thing, the live NFL games.
As for what Fox plans to charge for its remaining in-game ad units, Evans says he’ll have a better idea following week one.
“We are still finalizing holds to orders [the number of ads reserved in the upfront compared to those actually paid for as the season begins],” he says. “Once that information is finalized, we will have a better handle on what we can charge for ads in scatter.”
Evans says all of Fox’s NFL show sponsors are back including GMC as its pregame show sponsor and Verizon as its halftime sponsor.
Strong Ad Categories
One tactic that the networks used to motivate entertainment primetime advertisers to spend more — particularly consumer packaged goods marketers — was offering better pricing for entertainment primetime ad packages that included the NFL.
The competition in the auto and telco categories motivated an increase in NFL spending by those advertisers, while retail, beer and alcohol and quick service restaurants (QSRs) were also strong.
The insurance category did not show large spending increases, but some of that is due to the fact that the major players like GEICO, Progressive and State Farm are involved in multi-year deals.
And GEICO, one of the largest spenders in the NFL over the past decade, has changed media agencies and is said to be looking to reformulate its ad buying strategy.
CBS And The Super Bowl
CBS sold over 85% of its NFL ad inventory in the upfront and saw mid-single digit CPM increases, according to Bogusz.
Bogusz says the network is also 90% sold out of its 2024 Super Bowl ad inventory, which he adds is pacing way ahead of when CBS last televised the Super Bowl in 2021.
Bogusz estimates that about two-thirds of the advertisers placing ad commitments in the Super Bowl are returning from this year’s game, while the remaining one-third are new advertisers.
He says the automotive category has the largest amount of ad dollars committed to the Super Bowl right now.
As for Super Bowl ad pricing, Bogusz wouldn’t comment, but media agency executives say unit costs are ranging between $6.2 million and $7 million.
“It depends how much an agency spends in the Super Bowl,” one agency exec says. “Some agencies are paying $6.5 to $6.7 million, others who are buying multiple units for their clients could be getting Super Bowl pricing in the $6.2 million and $6.3 million range, while advertisers buying one unit are paying $7 million.”
Amazon Prime Video
Amazon Prime took some major steps in selling its second year of Thursday Night Football, according to most buyers.
While pricing and sellout levels were not public as the NFL upfront was completed, media buyers at the various agencies all said that clients returning to TNF all bought more ad inventory earlier than last season and increased overall spending. And some new advertisers jumped on board.
Meanwhile, agency execs were understanding of the difficulty of taking over an NFL telecast for the first time.
“Amazon acquired the TNF rights away from Fox close to the start of the upfront last year and they were novices in trying to sell inventory among the veteran networks heading into the season,” one agency buyer says. “They had to put together a sales team very quickly and tried to position their streaming telecasts at the same level as the linear telecasts when setting their initial pricing.
“This year they definitely have much better data to sell with and they hit the marketplace much earlier. We definitely did a lot more spending with Amazon TNF this year. Actually, we more than doubled our ad spending budget on TNF.”
One selling point is Amazon’s younger audience. Last season their median audience age was three years younger than Fox’s TNF the previous year.
“Eventually as the other networks’ NFL audience ages continue to rise, Amazon will be able to make more inroads,” another buyer says.
“Last year’s audience numbers were better than I thought they’d be,” the buyer says. “There is enough NFL ad inventory out there where advertisers don’t have to buy TNF but the product is better, the production is better, the audience is bigger, so more advertisers are looking at it.”
Another buyer says the NFL has helped Amazon Prime by giving it better, more competitive regular season games and creating for it an exclusive “Black Friday” game in primetime for Thanksgiving weekend.
Hidden Benefit Of NFL Ads
How valuable to marketers are ads that appear in NFL games on each of the networks, and how do they compare with ads on other programming on those networks?
According to iSpot.tv data, during the NFL season, the game telecasts accounts for 48.1% of household TV ad impressions (53 billion) on Fox, which is No. 1 among all programming on the network.
The NFL accounts for 25.3% of household TV ad impressions (8.4 billion) on CBS, which is No. 1 among all programming on the network.
The NFL accounts for 23.6% of household TV ad impressions (38.7 billion) on NBC, which is No. 1 among all programming on the network.
The NFL accounts for 14.6% of household TV ad impressions (13 billion) on ESPN, which is No. 3 among all programming on the network.
And the NFL accounts for 5.32% of all household TV impressions (8.4 billion) on ABC, which is No. 7 among all programming on the network.
Driving the importance of those statistics home, one media buyer points out that an advertiser can buy a primetime TV schedule with just NFL and college football games in fourth quarter and reach a massive audience.
“Primetime today is sports,” one agency media buyer says. “You no longer need entertainment programming.”