By Sheila Dang
Aug 24 (Reuters) - With just two weeks to go before the Kansas City Chiefs and Houston Texans kick off the National Football League’s 2020 season, advertisers and sponsors are preparing for the worst in case the coronavirus pandemic disrupts or even outright cancels the season.
The stakes could not be higher for the NFL, which brings in close to $3 billion in advertising for the TV networks and is one of the last remaining live events that draw huge audiences for advertisers in a year when most college sports and the Tokyo Olympics were put on hold, ad agency executives said.
“We’re making sure the contingency plans have contingency plans,” said Doug Rozen, chief media officer at ad agency 360i, a unit of Dentsu Aegis Network, which counts 7-Eleven and Ben and Jerry’s as clients.
While all signs point to a Sept. 10 kickoff, according to the NFL, advertising agencies are moving ahead with backup planning. Possible plan B's include shifting some of their clients' marketing budgets into online video platforms like YouTube, Hulu or Roku that have racked up audiences during the pandemic as viewers have been trapped at home, Rozen said.
Advertisers are also considering moving money into digital ad formats that are focused on ecommerce and pushing sales, which has become more important during the pandemic, he added.
Meanwhile, official NFL sponsors, which sign multi-year contracts that were worth $1.47 billion last season for the league, are still busy figuring out how to replace their usual advertising inside the stadium, since many teams have chosen to play games without an audience in the stands, according to sports marketing agencies that serve sponsors.
Brands and teams are working together to get creative and reach fans on digital or social media, such as hosting virtual autograph signing events for players, said Molly Arbogast, chief executive at POV Sports Marketing.
Sponsors are preparing for all possibilities because it would be “naive to think that football will be immune to what happened in baseball,” she said, referring to the recent virus outbreaks in Major League Baseball, which has led to nearly 40 games being postponed after the season started due to positive COVID-19 cases.
Still, no amount of contingency planning is likely to provide the same exposure for sponsors and advertisers that they would have gotten from the NFL.
“Everyone needs the games to be played,” Arbogast said, adding the NFL’s importance is why some sponsors and teams may work together to extend their contracts if an entire season is canceled.
Networks including Walt Disney Co’s DIS.N ESPN and Fox FOXA.O which hold the rights to air certain nights of NFL games are likely to see higher prices for remaining ad slots, especially now that leagues have canceled the fall college football season. But the networks will likely find it difficult to convince advertisers to shift all their money onto other content on their platforms if the NFL season is disrupted, media buyers said.
The uncertainty and economic challenges are already complicating discussions about advertising during the Super Bowl in February. Some brands have yet to decide whether and how they will advertise during the biggest televised event of the year, said Tom McGovern, president of Optimum Sports, a unit of Omnicom OMC.N, which works with brands like Pepsi and State Farm.
CBS VIACA.O, which will air the Super Bowl, is expecting to charge an average of $5.5 million per 30-second commercial, in line with last year’s rate, and is also requiring advertisers to purchase space in the online stream of the game for about $200,000, according to a source familiar with the matter. In 2019, CBS streamed the Super Bowl on its CBS All Access streaming service as well as all CBS Sports’ website and apps.
"There is no replacing the NFL," McGovern said. "Without college football, you have less (ad) supply, and the NFL was the contingency plan for that."
(Reporting by Sheila Dang; additional reporting by Helen Coster; editing by Kenneth Li and Chizu Nomiyama)
((Sheila.Dang@thomsonreuters.com; +1 972-974-3861))
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