Who's planning to watch the Super Bowl online this Sunday?
2015 is the fourth consecutive year that fans can catch the live game online. Since NBC announced that game day activities will be streamed for 11 glorious hours—including, for the first time ever, the halftime show—to U.S. based desktop and tablet viewers, free of charge, anticipation has been building like never before. (The mobile live stream is available at no charge exclusively to U.S. based Verizon subscribers via the NFL mobile app.)
Oh, and bonus for pay TV subscribers: Your cord-cutting loved ones will stop asking to "borrow" your credentials! Terrific.
With media fragmentation growing and the sales impact of traditional Super Bowl advertising being called into question, NBC's Super Stream Sunday will prove to be an effective monetization strategy in the long run. Online streaming gives advertisers the ability to reach additional viewers, with the added potential of serving more targeted ads.
Still, at this point in history, why would any advertiser invest in a channel that is historically 200x smaller than the linear broadcast audience, as 18 of the 70 Super Bowl XLIX telecast advertisers did? A 30-second national television spot sold for $4.5 million this year, and while I have not seen verifiable reports of what it cost to run an online spot, NBC reports that it generated "eight figures" of revenue in online ad sales, or 3x what it did online in 2012. So while the cost of running online ads alongside televised ads was not monumental, the CPM is dramatically higher.
Which may explain why all but one of the Super Bowl advertisers are running the same creative on linear broadcast and online this year. Until the ROI of the model is proven, incurring additional production costs (which average $1 million per spot) may not be at the top of the list for brands that just paid the highest price for a Super Bowl spot in television history... though having an online presence certainly is.
Outlier T-Mobile does plan to run a spot titled The Vulture, which is the first-ever Super Bowl ad created specifically for digital broadcast. I believe we will see this trend continue. By broadcasting their ads live to an online-only audience, brands can reach a demographic that was previously out of reach on Super Bowl Sunday: cord cutters. It is a well documented reality that most millennials just don't watch live TV, and they aren't the only ones. When these consumers gather in the digital arena for game day, brands have a collective captive audience. Today's cord cutters are tomorrow's purchasing power after all, and advertisers have to start somewhere. TV 2.0 is here.
This year, total projected Super Bowl viewership is expected to increase by 150% over 2014; I expect the portion of online viewers to rise even more dramatically than that, beating last year's average of over 500,000 viewers per minute. As a point of comparison, online viewership in the U.S. exceeded 5 million for the U.S./Belgium match in the 2014 FIFA World Cup, shattering previous records. While I do not expect online Super Bowl viewership to be that high, I won't be surprised if it doubles from last year to hit the million mark.
Whether advertisers see returns from their online spots remains to be seen. But live sports are one of the last holdouts of linear broadcast, and the Super Bowl is arguably the paragon of live sports casting in the U.S. The erosion of linear TV advertising revenues has broadcasters pursuing other options. Free online streaming of the Super Bowl XLIX is one of them.
How do you think it will play out—for viewers, brands, and broadcasters? Bit of a nail biter if I do say so myself.