The World Cup Offers Some Respite From NetflixBloombergOpinion
(Bloomberg Opinion) -- Bookmakers name Brazil, Germany, France and Spain the favorites for soccer’s World Cup, which kicked off in Russia on Thursday. The only guaranteed winners are the TV stations showing the games.
TV advertising in general isn't quite the bonanza it once was, as millennials shun traditional scheduled shows in favor of subscription streaming services such as Netflix Inc. and Amazon.com Inc. – or just hanging out on social media. Spending on digital ads overtook television spots for the first time last year.
This gives tentpole events like the World Cup an outsized importance for traditional broadcasters trying to secure ad dollars from the big-name brands. Even though there’s evidence of TV sports viewership declining for major club championships such as the NFL and the English Premier League, big sporting events are now pretty much the only time that a large audience will sit down and watch a scheduled show with ad breaks.
The World Cup is the international pinnacle, especially given that its TV audience is still rising. It’s a unique opportunity to target higher-earning men aged 18 to 34, a sought-after demographic that tends to watch less TV than other groups, according to Enders analyst Andrew McIntosh. That makes it beloved by beer brands, carmakers and betting companies.
And it explains why the price of a World Cup ad continues to rise, outpacing the increase in viewership. In Britain, for instance, a 30-second halftime spot for England’s 2010 group game against the U.S. would have cost about 220,000 pounds ($293,000) and reached more than 12 million adults, according to media agency the7stars. At the same stage in 2014, against Uruguay, that jumped to 340,000 pounds and 15 million viewers.
The first game in 2018 that will be televised by the British commercial broadcaster ITV Plc is expected to cost about 450,000 pounds and to be seen by more than 17 million adults. This game against Belgium might well be the group decider, so is more of a draw than the comparisons from previous years, but the upward trend during World Cup years still holds.
This needs to be seen too in the deflationary context of non-sports advertising. A 30-second slot during Coronation Street, a long-running soap opera that’s one of Britain’s most popular shows, would have cost 51,000 pounds in 2014. That fell to 49,000 pounds this year, the7stars said. You can see why a national broadcaster’s financial performance can be tied so closely to FIFA’s showcase event.
The U.S. hasn’t made it to the tournament this year, but that hasn’t dented the World Cup’s popularity too much among advertisers. For the 2010 World Cup in South Africa, TV ad spending in the U.S. was $82 million, according to Kantar Media. This year, it’s expected to hit $600 million.
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