Amazon is bringing its new NFL "Thursday Night Football" package out to advertisers with a hefty price tag that could cost sponsors as much as 20% more than what they were paying for those games on broadcast TV, according to people familiar with the situation.
Over the past two weeks, Amazon has sent proposals to the NFL, which is presenting the options to official sponsors, according to media buyers, who spoke on the condition of anonymity. It’s common for NFL broadcasting partners, which now include Amazon, to offer the league’s top sponsors the right of first refusal.
Amazon has the exclusive rights to stream "Thursday Night Football" starting this year, running through 2033, which is the first all-digital distribution deal for the league. "Thursday Night Football" had previously been airing on Fox. The streaming rights were reportedly worth more than $1 billion a year, and Amazon has been on a marketing push to promote its new crown jewel.
“It’s a very interesting play,” said Cara Lewis, U.S. chief investment officer at Dentsu. “I do think clients are interested to make that move [to streaming] because they know what the future is and they know the continual viewership is moving there.”
Lewis was not able to speak to Amazon’s positioning in the advertising markets, except that she works with brands that would likely review proposals. In a blog post on Thursday, Amazon noted that the Prime Video and Twitch audience could add 13% incremental reach over linear NFL audiences and an 8% incremental reach over all linear live sports.
The most-watched Thursday game this season, not including the one on Thanksgiving Day, drew more than 20 million viewers; but audiences are typically smaller, ranging between 10 million and 20 million viewers.
One buyer said that sports advertisers are used to seeing viewership drop any time a game moves from broadcast to cable TV, and especially to streaming. Amazon will measure the games using Nielsen ratings, the traditional measurement associated with TV, according to several media buyers.
Media buyers also said that Amazon is expected to raise the CPMs or cost to reach 1,000 views.
Amazon has asked for up to $30 million from sponsors, which ad buyers said was an expensive first salvo. Amazon is offering the traditional sponsorships, with pregame, pre-kick, halftime, and post-game slots, according to media buyers.
“There’s a structure to their breaks that’s going to have to mimic what’s been on traditionally,” said one of the media buyers.
Amazon also appears to be offering advertisers more robust upfront ad deals that go beyond NFL, the media buyers said. The sponsors would also receive ad exposure on other properties like IMDb TV, Amazon’s free, ad-support, over-the-top TV channel.
But it doesn't seem like Amazon has sold any inventory yet, as they wait for packages to be reviewed, another sports media buyer said.
Read: How Amazon's annual ad spending rocketed to $16.9 billion
Amazon’s "Thursday Night Football" represents a turning of the tide in the world of streaming and live sports, which is the strongest segment remaining in old-school TV, too. Ad buyers are interested to see how Amazon can use its new leverage in the marketplace to bring in more ad dollars. In the fourth quarter, Amazon’s ad sales grew 32% year over year to $9.7 billion. Amazon has an ad network that delivers ads to third-party websites; it has Fire TV, IMDb TV and Twitch; and it has its website where brands buy search and display ads to sell products.
Amazon is showing off its rights to football games every chance it gets, including at industry events like the IAB’s annual Newfront sales conferences. Amazon will promote "Thursday Night Football" in a Super Bowl commercial this Sunday. Last month, Marie Donoghue, VP of global sports video at Amazon, discussed what “brands should know about live sports streaming” in a blog post on Amazon’s ads website.
Amazon also streams pro football, tennis, soccer, basketball and baseball on Prime Video.
“While sports broadcasting has remained largely unchanged over the last several decades, this shift offers Amazon an immense opportunity to evolve the broadcasting landscape and build unique experiences that allow fans to customize how they engage with sports,” the post said.
Amazon is building its ad sales team to take advantage of the NFL rights. Amazon has created a new position, with an online job ad posted, looking for a director of NFL sales. “Our team will be looking for someone who can manage and develop a team of salespeople who will work directly with sports agencies, holding companies and clients,” the ad said. “They will need to build vertical strategies into the sports marketplace for the first time with exclusive NFL, TNF rights in 2022.”
Amazon also was seeking a head of pricing and planning, marketing strategists, NFL planners and account executives.
The NFL has official sponsors in almost every category: Subway is the official sandwich, and Pizza Hut is the official pizza. Ford is the official truck, and Hyundai is the official SUV. These are the types of brands that get first dibs on any new NFL rights, before the sponsorships are brought to other advertisers.
In Amazon’s case, however, there are still questions around whether all official sponsors are able to participate. For instance, Amazon is known for not running beer and alcohol commercials, which is a standard category for the NFL. Bud Light is the official beer of the NFL. One media buyer said that Amazon has been considering how it could accommodate such advertisers.
Still, Amazon has bigger plans for sponsorships, too. Its job openings said, “we look to establish a new way to transact around sports and streaming and how we partner with our customers.”
Amazon will stream the games to Twitch, its younger-oriented video site, which could open new types of football game coverage. Amazon’s job listings refer to developing “meaningful custom solutions” and the ability to discuss the “benefits of Twitch’s sponsorship products.”
“There’s an opportunity for customization depending on the appetite of the advertiser,” said another media buyer. “But it’s still going to have the elements of the traditional format.”
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