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Amazon Compensating Advertisers After NFL Audiences Missed Estimates

 2 years ago
source link: https://www.businessinsider.com/amazon-thursday-night-football-audience-shortfall-advertiser-make-good-2023-1
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Amazon's 'Thursday Night Football' audiences missed estimates by up to 25%, forcing the tech giant to compensate advertisers

Jan 11, 2023, 12:48 PM
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Amazon Prime Thursday Night Football Truck

Amazon's "Thursday Night Football" streams missed audience estimates. Nick Cammett / Getty Images

  • Amazon is working to make advertisers whole after "Thursday Night Football" audiences fell short.
  • The tech giant's viewership was 25% lower than estimated, per an advertising source. 
  • Advertisers will likely give Amazon a pass since "TNF" was popular with young viewers.

Amazon has been scrambling to make advertisers whole for its "Thursday Night Football" broadcasts on Prime Video after audiences fell short of estimates, according to ad agency sources.

Amazon struck an $11 billion, 11-year deal with the NFL for Prime Video to be the exclusive streamer of "TNF" — part of the tech giant's bid to become a mainstream sports player. Amazon was betting it could recoup the cost of the deal with advertising revenue while using its NFL pact to promote its growing ad business more broadly.

For the 14-game season, "TNF" on Prime Video averaged 9.6 million viewers, according to Nielsen data shared by Amazon Monday. That's "TNF's" lowest figure since the NFL began selling it to media partners ahead of the 2014 season, according to Sports Business Journal. (Amazon's internal data showed a somewhat higher 11.3 million viewers.)

Viewership was up to 25% lower than estimated, leading Amazon to give some clients other ad inventory as a make-good for the underperformance, according to one ad executive. Giving make-goods means forgoing the ability to sell that inventory to other advertisers. Amazon has also been issuing make-goods after a holiday glitch caused some marketers to overspend on their campaigns.

An Amazon spokesperson emailed that the company was "very pleased with the viewership and customer feedback" for the first season. "We worked closely with our advertising partners throughout the season to deliver on our commitments, and we look forward to creating even more opportunities and innovations next season."

The "TNF" shortfall wasn't entirely unexpected, given the NFL's first streaming-only broadcast meant a change in habit for viewers used to finding the games on linear TV. There were questions about whether audiences would find the games on Amazon, and the company made a push to educate consumers on how to stream. People had to be $139-per-year Prime members to access the games (which were still broadcast in teams' local markets), and some fans had a hard time finding them on a new platform, despite Amazon's promotional efforts. 

Amazon also faced a learning curve on the ad sales front. It started out asking as much as $80 to reach 1,000 viewers — roughly twice what broadcast TV typically charged for NFL games — before lowering its ask to around $60. 

"TNF" viewership on Prime Video had a median age of 47, according to Amazon — 7 years younger than the NFL average on linear TV. "Amazon has been touting their younger viewership as a key benefit of the TNF move to their platform, which is a good thing certainly for marketers looking to reach a younger audience – however, I don't know that it's enough to balance out the value lost in overall viewership," said another ad buyer.

But advertisers are likely to give Amazon a pass overall, given this was the first season for a streaming-only "TNF." Also, Amazon was flexible on ad pricing and has a wide array of offerings — from Freevee and Twitch — that it can leverage to make up for any audience shortfall.

This article was originally published on January 9 and has been updated.


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