- Amazon’s exclusive deal on “Thursday Night Football” has pushed it into the mainstream of American sports.
- This deal shows how Amazon, along with other businesses, is using sports to increase advertising revenue.
- Analysts are estimating just how big Amazon’s sports advertising business can get and what it can buy next.
This is the third in a 10-part series examining Amazon’s burgeoning advertising business. The people driving it, the ripple effect on other companies, and the next.
Sooner or later, Amazon will be able to claim its “must see TV on Thursday”.
In September, Amazon CEO Andy Jassy might invite a friend to watch his beloved New York Giants in prime video. The e-commerce giant will be the only place Americans can watch “Thursday Night Football.” signature The blockbuster $11 billion, 11-year contract with the NFL exclusively shows.
This move has shifted Amazon from the mainstream of sports to the mainstream in the United States. “Thursday Night Football” comes with other large investments like movie studio MGM, which aims to bring Amazon to the heart of the entertainment industry and drive its advertising and retail businesses.
“It’s a great opportunity to create a Thursday night must-see,” Marie Donoghue, Amazon’s vice president of global sports video, told Insider. “This is a once-in-a-generation opportunity to build a franchise that positions us as a weekly destination for millions of current and future customers.”
Rich Greenfield, a partner at technology and media research firm LightShed Partners, described Amazon’s partnership as a quake.
“They are very happy with the early development of the sport, but this is just the beginning,” Greenfield said. “All of these tech companies are just investing as much time as possible. The time they spend is a way to make money in a variety of ways: advertising, retail sales, gadgets, etc.”
Online shopping heavyweights are doing everything they can to entice Madison Avenue to spend on football programs. Jassy touted the new package: Super Bowl Ad. Amazon Drafting anchors Al Michaels and Kirk Herbstreet Sing the season with our experienced network production staff. Donoghue said the team added about 60 people this year, excluding employees in marketing, technology and products.
They also created new logos and sent boxes of NFL merchandise to advertisers. And last spring, Amazon signed a deal with the League. to sell thousands of items For a profit-hungry football league.
“Interest has never been higher among the NFL or sports advertisers, so it’s the perfect time to ride this last season’s wave and take over. David David, Vice President and Co-Chief Investment Officer at Horizon Media, a media investment firm. As David Campanelli said, “Find the missing ratings score on your TV.”
Amazon is betting that advertisers will pay.
Sports and news are two programming genres that retain pay-TV subscribers, but their bases are weakening. Amazon’s message is clear.
– Sports spectators. In its marketing materials for advertising agencies and marketing partners, Amazon suggests that live sports streaming viewers could reach 107 million, a third of the US, by 2025, a 71% increase over 2021.
And you’re betting that advertisers will pay. Advertising age reported in February Pricing negotiations are starting to cost 20% more than broadcast partners are charging, and sponsorships can cost a whopping $30 million. One media buyer said that Amazon is promoting “Thursday night football” for about $50 CPM (cost to reach 1,000 people). This is to ensure viewers reach the level of broadcast TV compared to the roughly $40 traditional TVs charge for football coverage. Amazon Similar premium to broadcast TV When it debuted on Premier League football broadcasts in the UK in 2020, Amazon declined to comment on advertising pricing.
Amazon posted an astonishing $31 billion in advertising revenue last year and became the third-largest digital advertising company behind Google and Facebook, but growth slowed in the first quarter against the backdrop of difficulties related to the pandemic and the Ukraine war. . Insider’s parent company, Insider Intelligence, expectation Amazon plans to overtake Google and Facebook to increase its digital advertising share by 1.7 percentage points by the end of 2023.
Sports fuel the rest of Amazon’s business.
Amazon has created an almost perfect flywheel for sports. Use your homepage to drive consumers to your weekly game and then serve ads straight from the game to your online store to purchase team merchandise along with everything else.
In this way, Amazon can collect valuable data about consumer habits and select subscribers who have previously watched football on broadcast TV. New advertising, merchandise, and subscriber revenues will drive Amazon to make deals, such as its $8 billion acquisition of MGM, to further grow Prime Video.
Ed Desser said, “You may not be able to generate $2 billion in incremental revenue, but if you can generate $1 billion and $200 million in advertising, sell an additional $1 billion in merchandise, and distance yourself from your competitors, it’s worth it. There is,” he said. , president of sports TV consulting firm Desser Media.
Sports have also attracted new Prime subscribers. In the UK, where Amazon acquired Premier League TV, Additional 635,000 subscribers Signed up for Prime Video in Q4 2020.
The NFL and Amazon have considerable drawing power. 2021 NFL Games Dominate the top 20 stations in prime timeAccording to , Variety, excluding the Super Bowl, it has about 20 million to 42 million viewers. The NFL averaged 17.1 million viewers in the regular season last year, a 10% increase.
In the case of Amazon, as of April 2021, the number of Prime subscribers exceeded 200 million, 175 million people watched a movie or TV show. From Prime Video.
‘Moment of Waves’
The sports market expects Amazon to bring not only scale, but innovation to the presentation of NFL games that typically involve two sports broadcasters and a former player on the phone. The league already has its own channel on Amazon’s gaming platform.
Introduced the first female NFL broadcast team Hannah Storm and Andrea Kremer.and 4 years ago
ESPN’s veterinarian, Donoghue, outlined Amazon’s big plans to attract fans and advertisers, highlighting how Amazon could choose a cord cutter to increase its audience.
Fans will cover graphics, stats, and more to give you a complete understanding of the game. Feeds feature coaches and celebrities, some targeting specific demographic groups. Pre- and post-game coverage and content will provide additional opportunities for advertisers. And the game is also on Twitch.
“They’re trying to figure out how many people will come. What does that audience look like? How can you potentially market something else to that audience?” said Tim Scanlan, vice president of sports broadcasting and media at Octagon, the sports sponsorship and management company representing Storm and Kremer.
Greenfield expects Amazon to revolutionize advertising, for example, with advertising tailored to individuals on the pitch. One media buyer said Amazon was looking for a way to allow advertisers to personalize their messages for different groups instead of sharing them with other advertisers for 30 seconds.
And the NFL may be just the beginning. Amazon just signed a contract Bringing MMA fights to Prime Video with One Championship. It owns a stake in the local sports network Yes and started providing exclusive streaming access to 21 New York Yankees matches in four states in April. You may want to try to get some of NFL Media’s own ventures, which include NFL Films, NFL RedZone, and NFL Network. The league has turned to Goldman Sachs to find a strategic partner, The Wall Street Journal reported last year. Over the next two years, NBA basketball rights will be in your hands.
Warner Bros. with Comcast and Paramount. Other media giants like Discovery and Apple won’t stand by. Apple Reportedly Duel with Amazon for NFL’s $2 billion “Sunday Ticket”.
“They don’t seem to have made many mistakes so far,” said François Godard, senior media and communications analyst at Enders Analysis. “We’ve seen them buy smaller packages and then larger ones, being careful not to feed price inflation on European rights.”
Sports media consultant Patrick Crakes wondered if Amazon could eventually make a massive acquisition of Fox or Paramount Global (formerly ViacomCBS).
However, Amazon’s ownership of “Tursday Night Football” is already large enough.
“Yearly, year after year, the second most popular TV series will now air exclusively on Amazon. If that’s not a watershed moment, then what?” Greenfield said. “It’s a pegged ‘we’ve arrived’.”