NFL’s Regular Season Ad Revenue Fell 1.2%, as Makegoods Overtook Unit Rate Increases

Football broadcasters collected $2.42 billion worth of in-game ads

NFL ratings were down 10% during the regular season, which lead to an increase in makegoods for advertisers.
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It didn’t happen until the final month of the regular season, but the 10 percent drop in NFL ratings this year finally dented the bottom line when it came to football-related ad revenue, according to new data from Standard Media Index.

In-game NFL advertising revenue during the regular season declined 1.2 percent this year, to $2.42 billion, down from $2.45 billion in 2016.

The data from SMI, which tracks 70 percent of national ad spending from global and independent agencies, is based on total ad spend on NBC, CBS, Fox and ESPN broadcasts during the regular season.

While the average cost of a 30-second spot grew 1.2 percent this season, from $499,000 to $505,000—and commercial loads were flat—it ultimately couldn’t compensate for a jump in makegoods to make up for this season’s 10 percent ratings drop in total viewers. Makegoods accounted for 23 percent of units this season, up from 21 percent in the 2016 season.

The ad revenue decline ends several years of overall NFL ad revenue growth. 2016 saw a 3 percent jump in ad revenue to $2.45 billion, while 2015’s $2.38 billion in ad revenue was a 9.6 percent increase from 2014’s $2.17 billion figure.

During most of the NFL season, ad revenue had once again been up year over year, even as ratings fell. In the season’s first three months, ad revenue had increased 2 percent among all networks, while makegoods had fallen slightly, from 22 percent in 2016 to 21 percent in 2017.

But as the ratings losses held steady, the makegoods surged in the final month.

The top category in the NFL this season was automotive, which spent almost 50 percent more than the No. 2 category, consumer electronics. But the spend in both categories declined year-over-year: automotive fell 5.4 percent, and consumer electronics dropped 3 percent. Other categories increased their NFL spend this season, including insurance (up 30 percent), alcoholic beverages (a 16 percent jump) and quick-service restaurants (a 6.4 hike).

While regular season revenue was down slightly, NBC Sports expects to generate around $500 million in Super Bowl LII-related advertising on Feb. 4, which would be a single-day record for one media company. That includes $350 million worth of in-game advertising, where 30-second spots are averaging north of $5 million.

This year’s ratings dips, and advertiser concern over protest coverage on TV, haven’t scared off media companies from continuing to invest heavily in football. Last month, Verizon committed more than $2 billion over five years in its new NFL streaming deal, which will enable it to stream more games, including the Super Bowl, to all smartphone users, not just Verizon customers. And NBC, CBS and Fox all submitted bids for next season’s Thursday Night Football package, according to Sports Business Daily.

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