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Playing the Field: Sports OTT Advertising

Over-the-top (OTT) streaming services give viewers direct access to content over the internet, bypassing broadcast, cable and satellite TV platforms - also known as Linear or Pay TV. OTT services have become a much bigger deal in recent years as more people leave their Pay TV subscriptions behind for the affordability and on-demand nature of OTT. They’ve affectionately become known as “cord cutters.”

One of the last strongholds of linear television is sports streaming. Long-term contracts ensure that broadcast networks still dominate live sports streaming in the US, but digital OTT platforms are rapidly going after this valuable corner of the entertainment market. It seems they’ve learned what Pay TV providers have known for decades: sports brings subscribers, especially live sports events.

The Pay-TV Innovation Forum, a global research program that analyzes the challenges facing Pay TV providers, noted in their 2019 report that expansion of sports OTT platforms poses a significant threat to Pay TV holding on to tier-one sports content and customers. Sports OTT providers are in an experimental phase, where they can try different pricing and packaging models to find the right balance to attract consumers and remain profitable.

This puts advertisers and media buyers in an uncertain position. Sports OTT is shaping up to be a big deal, but these new streaming platforms suffer from the same challenges OTT advertising has been facing for several years. Is it a smart move for your marketing strategy to shift ad spend to these sports OTT platforms?

Sports Streaming in the US

According to eMarketer, OTT disruption in the sports streaming industry is coming from several areas: the top leagues offering their own subscription-based streaming services, broadcasters and startups running their own standalone services, linear OTT services streaming live content over the internet, and digital and social media companies who have bought coveted streaming rights. It’s clear many different players can see the benefits of winning the streaming wars for live sports, but all of this activity has led to a very fragmented sports OTT landscape.

Streaming services are competing for consumer share of time as well as their subscriptions, meaning advertisers have to divide up their budget to reach more of their target audience. Currently, advertisers can buy inventory to reach consumers watching the same content in several different ways with several different companies. OTT advertising can be bought directly from providers or programmatically through third-party aggregators, though many platforms sell both ways.

Buying directly from an OTT provider will give you more control over where your ad runs but less control over reach and frequency across your entire media plan. Going through an aggregator will afford you better control of your reach and frequency across a group of OTT platforms, but you’ll have less say in where these ads run.

The avenues for OTT advertising are in as much flux as the industry itself, with new products launching and media acquisitions happening every day. The mechanisms for better tracking and analyzing the value of advertising dollars are still developing. Sports OTT is also not a guaranteed advertising gold mine. Platforms are still learning how to match the right sports with the right audience, and as the niches get smaller in the OTT landscape, this task becomes more difficult. Without good data and planning, you could be paying to air your ads where your audience isn’t viewing.

The MVPs of OTT

Unlike the entertainment streaming wars, there is no Netflix-equivalent heavyweight that looms above the rest in sports streaming. There are some notable rising stars, though.

You’ve got your:

  • League streaming subscriptions (UFC Fight Pass, NBA League Pass, NFL Game Pass)

  • Forward-thinking Pay TV broadcasters moving into OTT (CBS Sports HQ, NBC Sports Gold, ESPN+, Fox Soccer Match Pass)

  • Skinny Bundles popular with sports fans who don't want to buy full cable packages (FuboTV, Sling TV, AT&T TV NOW, SONY PlayStation Vue [will be shut down as of January 30, 2020])

  • Pure Play companies focusing only on sports OTT services (DAZN, Flo Sports, Stadium)

  • Tech and eSports providers with the capital to invest in sports OTT (Amazon Prime Video/Twitch, Facebook, Twitter)

Right now, no one has cornered the US market. DAZN may be the largest single streaming service worldwide with 4 million subscribers, mostly for sports such as MMA and boxing. It doesn’t have a large presence in North America, though. Within the US, ESPN+ has attracted around 2.4 million subscribers since launching in 2018. This is nowhere near the audience of sports content offered through Pay TV services, though.

These are just the bigger names, too. Many niche sports are only streamed digitally, and they carry a small but loyal fanbase. The point here is that there are a lot of places you can look to for sports OTT advertising. There’s no perfect system yet. If you feel your brand’s messaging will appeal to an audience of sports enthusiasts, and you see value in OTT as a channel for your media strategy, you’ll need to do your own investigating and determine how to approach these platforms.

Sports OTT Advertising in Your Media Plan

OTT services are quickly growing in popularity. According to programmatic advertising technology company, OpenX, half of US adults over 18 use at least one OTT platform. In order to keep live OTT streaming of sports events affordable for viewers, OTT providers need advertising, sponsorship deals and other branded content that can deliver value for brands while also enabling platforms to invest in new technology and improve their service. This symbiotic relationship can be great for your brand, but be cautious.

To ensure that you’re reaching the audience you want and not flushing your budget down the drain, you should consider working with a media buying agency that knows how to navigate the complex OTT ecosystem. Our media planners and buyers have closely followed the evolution of online streaming services, and we can help you make sense of the fragmented playing field upon which these platforms exist. Our media stewards want you to get the most bang for your buck, and we will work closely with your team to make sure the budget, creative and media plan all align for success. Contact The Ward Group today to meet your newest allies in the media industry.

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