Brands are increasingly buying live sports ad inventory programmatically, but the audience segmentation, targeting and attribution that typically comes with programmatic advertising has yet to follow.
“There’s a good portion of our client base for whom live sports is front and center of the conversation,” says Todd Porch, CEO at Strategus, a digital agency specializing in connected TV advertising. “But we’re still in the early innings of attribution.”
The gap between the high demand for live sports ad inventory and the limited technical sophistication has resulted in brands buying CTV live sports ads much like they would linear sports broadcasts: as reach and brand plays, as opposed to precisely targeted ad campaigns typically conducted through programmatic.
Take, for instance, the World Cup, which concluded this July, and netted Fox and NBCUniversal a combined $166 million in streaming ad revenue, according to ad intelligence platform Guideline, a 839% increase from the previous World Cup in 2022. The surge in revenue reflects more consumers viewing live sports on streaming. Nearly half (48 percent) of Telemundo’s World Cup audience watched the games on streaming, for instance, up from 30 percent four years earlier.
As popular as live sports programming may be for brands, the targeting for live sports campaigns is rudimentary. “There may be some light targeting for live sports buys, such as region or basic audience demographics, but certainly not the performance marketing tactics we’re seeing become more popular in general streaming ad buys,” Mohammad Chughtai, Global Vice President at programmatic ad buyer MiQ, recently told AdExchanger.
This is largely due to a technical challenge, explains Ari Paparo, CEO of Marketecture Media. Programmatic inventory is designed to be bidded on in open marketplaces in real-time. But live sports function differently than the usual ebbs and flows of consumer viewer traffic. Live sports broadcasts cut to commercials at unpredictable intervals, causing sudden spikes in available ad inventory. “That makes it a bad fit for the traditional demand-side platform model, where you’re bidding on specific users in real-time,” Paparo says.
This is why most live sports inventory isn’t available in open marketplaces, and is instead sold through private marketplaces or programmatic direct deals made directly through a network and marketer, Porch says.
Still, live sports ads are some of the most sought-after inventory in the industry, with CPMs approximately 30 to 40 more expensive than other connected TV ad inventory, according to Strategus. And as the targeting and measurement capabilities improve, so will the sophistication in ad delivery.
Strategus is already working CTV live sports exposures into its attribution modeling, tying live sports viewership to impressions and engagement on other screens and ecommerce platforms to measure the return on ad spend.
Ad executives portend a future in which live sports targeting is so precise that different households, even different screens within the same household, are served personalized ads during the same in-game ad breaks.
That is already happening with smaller sports broadcasts, such as Major League Baseball, which has an immensity of available ad inventory on account of each of its teams playing 162 games a year.
But major sporting events will continue to sell most of their inventory upfront, in the kind of large brand-building campaigns reminiscent of the TV of old. Indeed, the very allure of live sports is they are the last bastion of communal appointment viewing in an increasingly fractured media landscape, a valuable asset for brands looking to drive awareness.
“You’re going to see it move to programmatic a lot slower than on-demand streaming, which is already largely programmatic,” Paparo says. “The cultural impact events — the Olympics, the Super Bowl, the World Cup — we won’t see much of a change there.”
