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Monday, September 5, 2016

Lessons From Rio, as Live Events Make the Leap to Streaming

Sapna Maheshwari from the New York Times writes about watching behaviors in the 2016 Olympic Games and the future of live streaming


In this era of cord-cutting and streaming services, there has remained one constant for television networks and advertisers looking to draw a crowd: live events.
Millions of Americans have continued to flock to their TVs during prime-time hours to catch extravaganzas like the Olympic Games, the Super Bowl or the Academy Awards as they happen. But even live events are now finding their way onto streaming platforms, and marketers are wondering how they can be sure to reach those viewers, too.
“What you’re seeing is a shift in how people engage with content that they still care passionately about,” said Simon Wardle, chief strategy officer of Octagon, the sports marketing unit of the Interpublic Group. “It’s indicative of this world of choice in which consumers live, which is fantastic if you’re a fan but is a little challenging if you are an advertiser or a brand trying to engage those fans.”
The change came into stark relief this month during the
Summer Olympics in Rio de Janeiro. Thirteen days in, NBC's average prime-time audience of 26.7 million viewers was incredibly high — more than triple the combined number of people watching ABC, CBS and Fox at that time. But it fell short of the network’s hopes. Some of that slip could be attributed to viewers dispersing to NBC’s live streams online or to its cable channels like MSNBC and Bravo, which were also showing the Olympics. (Also surely a factor: Some marquee events were shown on tape delay in prime time, meaning many fans already knew the outcome and may have been less inclined to watch.)
The network said live streaming accounted for 225,000 to 500,000 viewers a night. About 75 percent of the $1.2 billion in advertising NBC sold before the Rio Games was targeted at prime time, while almost 10 percent went to streaming.
Live streaming, whether through a web browser or the NBC Sports app, requires a cable subscription, and an ad plays before every stream. Only advertisers who bought television ads could buy digital ads, either video or display, and fewer brands were present there. The number of commercial breaks viewers of NBC’s live streams experienced was similar to those on television, but different ads were shown on the live feeds of a wide variety of sports, like badminton and archery. Brands could choose to show either 15- or 30-second spots.
“Media buying is going towards not only wanting those traditional media spots, but integrating them with digital, especially when you have live-streaming,” Mr. Wardle said. “Having a presence on those platforms for brands in my mind is essential, because it’s disproportionately likely to be watched by these 18-to-34-year-olds, the elusive teen and young adult audience.”
Citigroup, a sponsor of the United States Olympic team since 2011, has been working to adjust to the rapidly shifting landscape.
While television remained its top priority this year, it spent 25 percent more on digital ads for the Rio Olympics than for the London Games four years ago. In 2012, its online efforts focused on banner ads, while this year it created “snackable bites” of video to run on the web, according to Tina Davis, Citigroup’s managing director of sponsorships and marketing. That refers to shorter videos — perhaps 15 seconds long, as opposed to 30- or 60-second commercials — that may be more easily digested on a live stream.
“I feel like live events will always generate a high viewership, and that if people tune in, digital is Option 2,” Ms. Davis said. Still, the company has created “a nice mix of television and digital content that allows us to take advantage of the shift in viewership from television to live streaming to viewing later after a performance,” she added.
Leading up to the Rio Games, NBC officials said they thought their prime-time audience would match or exceed the London Games in 2012, which drew an average overall viewership of 31 million people a night. Instead, the network had to offer free commercial time to advertisers through the end of the Rio Games to meet its ratings guarantees, an NBC spokesman said on Thursday.
As streaming becomes a bigger part of live events, questions loom around not just how to make ads that work on different platforms and devices, but also how to measure their effectiveness. For example, what is the value of a broadcast view versus a streamed view?
“You’ll see considerable analysis from NBC and sponsors and people like us trying to understand the true net impact between the two,” said Doug Rozen, chief digital and innovation officer at the agency OMD.
Dick’s Sporting Goods, a first-time advertiser at the Olympics, said it ran the same commercials on NBC’s live streams as it did on cable and broadcast. The retailer has been pleased with the television ratings and the jump in streaming, said Ryan Eckel, vice president for brand marketing at Dick’s.
“We’re trying to look at it as video, and not think about whether it comes through cable or internet or a linear broadcast,” Mr. Eckel said. “I know I’m just as likely to watch the Games on the app on my Apple TV as I am on the linear broadcast.”
He expects networks to eventually treat streaming and television views similarly for big live events, especially as more advertisers vie for digital space.
“Over time, I think broadcasters are not going to differentiate,” Mr. Eckel said. “In a year or two from now, or maybe even sooner, the networks are going to just deliver you a video view, and run commercials on both broadcast and streaming, which will be great as an advertiser.”
He added, “It needs to become simpler.”
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