I was watching NFL Football games over Christmas recently, and one game was particularly interesting to me. It was the Arizona Cardinals versus the San Fransisco 49ers. But my interest was not peaked because of the matchup on the field. Instead, I was fascinated by the channel that was broadcasting the game. And it wasn’t the usual suspects: The NFL Network, ESPN or Fox! It was exclusively on Amazon Prime!
As the game progressed, the enormity of the situation began to sink in for me from a media buying perspective. First, I had to go through the Amazon Prime Video app on my phone and then cast the signal to my smart TV to get the signal. That step alone alienated most people over 60 years old. Then, a percentage of the commercials were dedicated to instructing people how to navigate their platforms to interactively view the game. For example, one promo focused on informing users how to use their Amazon-owned Fire Stick settings to get interactive stats on players. Again, more viewership alienation as a percentage of people watching had no idea what a Fire Stick is?
It became evident as the game progressed both Amazon and the NFL were using this game as a giant petri dish. First, most of the NFL’s network carriage contracts are expiring either at the end of 2021 or 2022. In the face of the growing cord-cutting trend on cable, the NFL is trying to understand what the revenue potential is for streaming games. If they can prove there is an appetite for streaming NFL games with consumers, this will give the NFL leverage when renewal negotiations with the networks begin, as well as open up a whole new revenue stream for stakeholders, which in turn, will lift team valuations.
With Amazon, the incentive is less about generating a new revenue stream as it is about providing increased value for their existing services. If they can increase their share of people who are willing to pay them $13 a month for all of the benefits of an Amazon Prime membership, then the sky is the limit for them.
It became evident as the game went on both Amazon and the NFL were using this game as a giant petri dish.
So this got me to thinking. (Finally, says my wife!) How does this rapidly changing media landscape directly affect my clients and our advertising agency? Well, like the NFL, our clients are looking to understand how changing viewership trends will affect their marketing efforts. And like Amazon, our ad agency is always looking to demonstrate value for our clients to justify our services and to remain relevant.
The NFL/Amazon partnership is just the tip of the iceberg when it comes to the seismic shifts going on in the world of media right now. Pervasive change is evident throughout all media channels. Cord-Cutters and Cord-nevers have permanently disrupted TV viewership patterns as streaming services move in and become a factor. Digital audio platforms like Sirius XM, Spotify, and Pandora have decimated terrestrial radio’s coveted “Morning Drive” revenues forever. Social media networks have forced marketers and advertisers to rethink the way they communicate with their customers. Innovations with data providers have opened up new avenues for advertiser’s to use their precious first-party data to influence buying decisions like never before.
Let’s face it, for most small to medium-sized advertisers who don’t have in-house marketing departments, keeping up with all the advances in MarTech is unrealistic. Many clients have been able to keep up with the technological change needed in their main field of endeavor. A restauranteur knows all about the latest in ovens. A car dealership is up to date with the latest software that helps them buy cars efficiently at auction. But when it comes to marketing their goods and services, the technological learning curve is high, and here is where many advertisers understandably become overwhelmed. For a good advertising agency however, this steep learning curve provides an excellent opportunity to prove value to the client.
Lets face it, for most small to medium-sized advertisers who don’t have in-house marketing departments, keeping up with all the advances in Martech is unrealistic.
In the example above with the NFL and Amazon, the marketing opportunity for small business lies with their ability to follow the audience shift. A good advertising agency will recognize the audience shift in real-time and help a client migrate with these consumers in an effort to maintain and increase market share. The deliverable to the client is dynamically presenting their goods and services to these shifting audiences on new platforms.
So back to the game. I think the winner was the San Francisco 49ers. On the field that is. In my mind, however, the real winner of the night was the burgeoning streaming industry, and all the ad agencies and advertisers who recognize and adapt to this unprecedented audience migration.