ARE NFL COMMERCIALS STILL WORTH THE EXPENSE?

Posted By Tim Cifelli November 3, 2016

Football, while still the biggest prime-time ratings leader, has seen a 10 percent drop off in viewers compared to the same period last year according to the latest Nielsen ratings report. Although the NFL is still at the top when it comes to viewership, there are signs that it is headed toward the same ratings decline as other live events such as the Olympics and awards shows.

The exodus of cable subscribers to on-demand streaming services is driving more viewers to the web and changing viewing habits forever. According to Nielsen data, time watching TV has dropped 11 percent since 2000. The decline is even sharper for those under 24 years of age – their TV viewing has dropped more than 40 percent.

Goal line defense
NFL games were considered the last line of defense against “cord cutting,” the elimination of traditional cable services from a home.

However, many advertisers are starting to suggest this is yet another symptom how on-demand viewing is changing the way people consume televised content. With entertainment options now available on any device at any time traditional networks are struggling to maintain their dominance. (None of the 2016 Emmy nominees for Best Drama series was produced or aired on a traditional broadcast network.)

While network and NFL executives try to divine the causes for the recent decline in casual viewership – from the presidential election (which traditionally impacts NFL ratings as more viewers tune in to cable news networks*), to over-saturation of the product (games now regularly air on Sundays, Mondays and Thursdays), to even the loss of marquee players due to retirement, suspension and injury – advertisers who rely on ratings giants like the NFL are forced to reconsider how to adapt to the new dynamic. Consumers now control how, when and where they view TV rather than having content fed to them on a pre-determined schedule.

Keeping Track
Many advertisers still believe that live sports are still the best option for reaching a large consumer audience compared to commercial-free networks and streaming services, since viewers are more likely to watch the games live and not record them for later viewing, where they can fast-forward through commercials. Largely, the industry is taking a “wait and see” approach to determine how far the bottom will drop, or if things turnaround after Election Day.

If this ratings slide continues, networks will have a harder time justifying the cost of their commercials as marketers look to shift their tactics to better reach the cord-cutters when and where they view TV. As Millennials are content with viewing highlights of the previous day’s game in short videos online, advertisers need to find ways to be relevant in that new format.

*Football viewing dropped 10 percent during the 2000 Presidential election, 2 percent in 2008 and 15 percent during the first five weeks of the current football season.