The most striking aspect of Thursday night's debut of sportsbook ads during an NFL telecast was that they were purchased at a princely rate, even though the map and math still argue against them. NFL game ads are the most expensive real estate in sports TV, at about $700,000 per 30-second spot, and sportsbooks' product still is available to only 30% of 21-and-over U.S. adults. Execs at sportsbooks say cobbling together local buys in legalized states will remain the more cost-effective route until that number is closer to 40%. And yet, there was DraftKings, Caesars and BetMGM running spots during Cowboys-Buccaneers. Viewers in California, Texas, Florida and New York, who together account for 34% of 21-and-over bettors, saw all those spots, but could not bet the game legally online. “It’s the first time that we have accepted the fact that we are reaching an audience -- and, frankly, spending to reach an audience -- that will not be able to directly transact with our brands,” said BetMGM CRO Matt Prevost, whose company plans 13 more spots during NBC games, as well as some on CBS. “This has been a fundamental shift for us. It is something that marks a bit of an inflection point in our brand and our advertising strategy to some extent, in that we start to take a strategy that is of a national brand vs. a local, spot-by-spot brand.”
BUDGETS ADJUST: The availability of commercial spots and pregame show integrations has forced the leading sportsbooks to reconsider budgets and media plans. As recently as five months ago, most would have said that the legalized map was several markets short of meriting a national buy, and certainly wouldn’t support a high-priced one. But then, the NFL opened for business. “When you’re building a brand and are in it for the long term, the best thing you can do is seed that brand,” said Caesars Sports CMO Sharon Otterman. “We’re out there telling a story and we’re entertaining. These national spots are not direct response for us. We can do direct response on channels that make sense to do direct response. This is telling our story. And even if all the population can’t act on it today, we know that a dollar invested today is going to help us in the long run. And we want to be a winner in the long run.”
AD REVENUE LIFELINE? Engine Media Exec Chair Tom Rogers said the combination of "cord cutting and lower ratings for legacy media" has set off a "scramble for new revenue by media companies, and sports gambling, many think, is the rescue line that sports broadcasters need” (“Squawk Box,” CNBC, 9/10). NBC Sports’ Mike Tirico said the NFL “has taken steps along the way” to embrace sports wagering, and sportsbook ads are “another step of the advertising and the partnerships that are out there." Tirico: "Will it change the game and how it's presented? For the most part, probably not, but I think some of the tongue-in-cheek conversation that would happen in some of the shows during the week will just become honest conversation. You're not going to hear it in the broadcasts that, ‘Hey, this touchdown is to cover the spread or not.’" The league "continues to say it is fan engagement," and it is "just trying to capitalize on that." Live sports are "one of very few things that still resonates on the business side of television” (“Power Lunch,” CNBC, 9/9).
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