Why advertisements underneath Covid-19 may very well be a discount

The Kansas City Chiefs celebrate with the Vince Lombardi Trophy after defeating the San Francisco 49ers 31-20 in Super Bowl LIV at Hard Rock Stadium on February 2, 2020 in Miami, Florida.

Ronald Martinez | Getty Images

There’s no better commercial on TV than the National Football League Super Bowl Sunday. Companies are using the NFL’s title game to launch new products and campaigns and raise consumer awareness.

But with the pandemic affecting NFL planning, advertisers who are not yet committed could get last-minute discounts on Super Bowl slots.

Kevin Krim, founder and CEO of advertising data company EDO, said advertisers had raised concerns about the NFL’s postponement of some regular season games when players with Covid-19 went out. They want security around the February 7th game.

“The marketers put a lot of emphasis on predictability,” Krim said in an interview with CNBC. “They don’t want things to keep changing and the NFL knows it. The playoffs are too valuable to be disturbed.”

“Nothing would be more devastating than a postponement,” added Dave Morgan of advertising data analytics company Simulmedia. The company uses its metrics to help advertisers measure the impact of national ad slots on network programming.

New York Giants wide receiver Sterling Shepard (87) caught a pass in the first half at MetLife Stadium in front of Pittsburgh Steelers strong security Terrell Edmunds (34) and linebacker Devin Bush (55).

Vincent Carchietta | USA TODAY Sports

NFL’s nightmare

The NFL’s most recent Covid-19 outbreak hit Baltimore Ravens, causing their contest three times in week 12 with the Pittsburgh Steelers postponed.

That hurt NBC. Advertising paid top dollar for the game originally scheduled for Thanksgiving – when everyone is home and enjoys watching football – but was eventually moved to the following Wednesday at 3:40 p.m. CET. Raven’s star quarterback LaMar Jackson was out due to Covid-19, which further dulled interest in the game.

Crimea estimates that advertisers have lost value for the game. His firm estimated that the NFL’s 2019 Thanksgiving night game generated $ 62.8 million for the network, and Morgan added that the 2020 competition would have been worth $ 70 million.

The Wednesday game drew 10.8 million viewers on NBC, compared to last year’s regular Thanksgiving game, which drew around 21 million viewers. When companies don’t get their negotiated audience value for the commercials, networks usually compensate for this with “make goods” – free commercials elsewhere.

Tony Ponturo, longtime sports marketing manager, said advertisers shouldn’t settle for the free commercials because “it’s an easy way for the network to pay off – with more units,” said Ponturo. “Yeah, it’s weight, but it’s not exactly the pressure you wanted it to be.”

Ponturo, the former vice president of global media sports and entertainment marketing for Anheuser-Busch, noted that advertisers want safe dates for NFL games because they too have plans for promotions. Should NFL games continue to be postponed, it will affect their marketing.

“You have to plan and put the weekly goals under pressure,” said Ponturo. “You can do promotions, you can have retail displays, you can have all sorts of things. And when games are moving, it’s not what you bought.”

“It’s a big problem,” added Morgan. “Corporations are planning to bring automobiles to market. They are planning pizza specials. You can’t postpone this for a week. You must already have your thousands of franchises out of sign and supplies. You must have trained teams, and they must. ” ahead. “

To combat more post-season postponements, the NFL hovered to keep teams in market-friendly hotels and considered a training camp model. But on Wednesday, League Commissioner Roger Goodell said the idea had been discarded.

Instead, the NFL will seek to combat further outbreaks by providing household members of players and team staff with Covid-19 tests that lead to the Super Bowl. Morgan said the training camp model could have reassured potential advertisers looking to do deals with CBS before the Super Bowl.

“The NFL needs to make sure it hits that date,” Morgan said. “I have to believe they are on top of it. They will control the environment for the players going to the Super Bowl.”

CBS ready to close a deal?

On the broadcast side, CBS may have to get creative with the remaining Super Bowl slots.

The ads are valued at $ 5 million to $ 6 million. According to Bloomberg, Fox raised more than $ 400 million last year and sold around 77 paid ads at around $ 5.6 million each. According to sources familiar with the network’s NFL pricing, CBS is charging roughly $ 5.5 million for 2021 spots.

The network has sold nearly 80% of its package, according to the Sports Business Journal, and national companies like Toyota have already secured spots. However, marketers estimated that most of the slots sold consist of pre-negotiated packages.

To keep the ad price on the remaining slots, media pundits said CBS would likely package the Super Bowl with other NFL or sports programming packages to make it attractive to companies that are still on the fence.

Ponturo said the move protects CPM (cost per thousand impressions) and CBS “can and will maintain credibility about the Super Bowl award.” [companies] was given different inventory to make all CPM work. Nobody knows what the secret sauce is to keep this unit price going, but they are all packages to some extent. “

But with Covid-19 intercepting portions of the NFL’s schedule, Krim says he isn’t “surprised that CBS didn’t sell as much of the game as Fox or NBC in the past”. He predicted that CBS could generate less than $ 600 million in revenue for the game’s commercials if the uncertainty surrounding the NFL persists.

“Nobody is going to try to close the last 20% until you’re sure,” added Morgan.

Lamar Jackson # 8 of the stiff arms of the Baltimore Ravens Juan Thornhill # 22 of the Kansas City Chiefs at M&T Bank Stadium on September 28, 2020 in Baltimore, Maryland.

Todd Olszewski | Getty Images

Morgan anticipates the ads will be sold out, but it could be up to the last few days. He said the move could also help CBS, as the network could pack in too much content to secure Super Bowl deals.

“They won’t negotiate until the days before,” said Morgan. “With alternative pricing models, money is always available – available the day before [the Super Bowl]literally. “

Crimea said the 2021 Super Bowl ads could also be influenced by movie studios holding back movies. Studios tend to be last minute buyers who wait to know the movies are complete. As theaters are either closed or could close again due to the recent surge in Covid-19, this may have an impact on buyers.

Crimea said non-tied businesses should “stay close” as discounts may be available too late.

“At the right price, especially if you can get a discount, you will get great results with an NFL ad,” said Krim. “The only thing you know about the NFL is the most exciting thing on TV, followed by the NBA.”