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The Return of Sports and its Impact for Marketers

Over the past six months, the world as we know it has changed due to COVID-19. Social distancing became a thing; companies had to reimagine how they conduct business while employees work remotely; wearing masks in public became required or strongly encouraged; and sports came to a screeching halt worldwide. The rapid shutdown of sports, their subsequent return, and the impact for marketers is what we’ll be discussing in this blog.

Professional sports in America stopped on March 11th when the NBA announced it would be pausing its season indefinitely after Jazz center Rudy Gobert tested positive for the Coronavirus.

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The next day the NHL, MLB, and MLS followed suit. For sports fans like myself, it was long and boring four months where we found ourselves searching for anything to fill the void sports left in our lives.  Competitive darts even made the watch list at one point. While the loss of sports was rough for fans, it was downright traumatic for networks and marketers.

Over the past 5+ years, we have seen a seismic shift in the way people consume media. The rise of streaming platforms, on-demand options, and DVRs led to the erosion of appointment viewing for shows like This is Us, The Masked Singer, and 60 Minutes because consumers want to watch their favorite shows when it’s convenient for them, effectively bypassing traditional broadcast advertising. Despite this shift in media consumption habits, sports have been largely immune due to its must-see-live nature, leading to the explosion in the value of those live broadcast rights.

A great example of the upsurge in value for live rights is the NBA. In 2014, the NBA signed a deal with ABC/ESPN/TNT that nearly tripled their annual revenue from just over $950 million/year to $2.6 billion/year. Networks don’t spend that kind of money out of the goodness of their heart, but because they make tremendous amounts of money selling the ads during the games. The cancellation of so many games across the MLB, MLS, NHL, and NBA forced networks to show lower-valued programming, effectively diminishing their ability to generate the amount of money they had in the past.

While this may all sound like doom and gloom, there is some light at the end the tunnel for networks and marketers. The MLS started back on July 8th, the MLB started on the 23rd, the NBA came next on the 30th, and the NHL kicked off its Stanley Cup Playoffs on August 1st. Preliminary ratings for all except the NHL appear to be up compared to 2019. The MLS Is Back tournament has seen a 7% increase in overall viewership during July and the MLB has seen a 17% increase in viewership on its regional sports networks. Before pausing its season, the NBA saw a 12% decrease in overall ratings when compared to the 2018-19 season. However, since the restart, they have seen about a 10% increase compared to the first part of the 2019-20 season, putting them almost back to the 18-19 season’s ratings. Unfortunately for the NHL, they did not see the same kind of lift in ratings that the other major sports saw. When comparing the first game of this year’s playoffs to the first one from last year, ratings remained flat and viewership actually decreased by 9%.

While the novelty of the return of sports has gone away, when we look at the numbers from the other professional sports leagues, we can reasonably expect the ratings for NFL games to remain flat or see a slight increase when their season kicks off in just a few days. When this occurs the greatest unknown for marketers and networks is what happens when a game (or games) has to be postponed or canceled due to players contracting COVID-19 like we’ve seen with baseball the first few weeks of the season. What does a marketer do to navigate this uncertainty, especially if they are trying to promote a limited-time offer? The answer – shift from traditional broadcast TV buys into programmatic CTV (connected TV).

Programmatic CTV has been a true game-changer for marketers because it allows us to use what is arguably the most powerful advertising medium, video, to reach our target customers while they consume content. Gone are the days of assuming that if we want to reach the most possible people in our target demo, such 18-34-year-old males, we need to purchase spots in NFL games and risk wasted impressions. Instead, we can put the demographics of our target customer into a DSP (we use The Trade Desk at Infinity) and reach consumers while they are watching what they like, whether it’s sports, news, or even cooking shows.

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In addition to the targeting benefits of programmatic CTV, there has been marked rise in the use of CTV over the past year, particularly since the pandemic started in March. According to Multichannel News, the use of CTV among consumers rose by 40% in 2019, and could increase by as much as 60% this year with people staying at home more than ever before.

The return of sports presents many opportunities to marketers, but it is up to us to determine the best way to leverage these opportunities to achieve the business goals of our clients or ourselves.

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