TV Ratings Lagging Behind What’s Valuable To Sports Advertisers

Despite relatively entertaining playoffs and final rounds for both the NBA and NHL this spring, many of the media narratives were not about the quality of the play (quite high). But rather, the chatter focused on the perceived TV ratings shortfalls for both leagues.

A “small market” NBA Finals went to seven games, yet couldn’t get past the weak ratings allegations, even after the decisive contest pulled in the best audience numbers since before the pandemic. In the aftermath, it’s reasonable to ask why anyone’s even so focused on ratings at all for events like the NBA and Stanley Cup Finals?

As USA Today’s Jeff Zillgitt even noted before the dust settled on the Oklahoma City Thunder’s series win over the Indiana Pacers, TV ratings don’t even reflect the full picture of fan reach, especially as audiences have so many different ways to tune in today.

What Matters To Sports Advertisers?

At one point, reach was all that mattered for advertisers, but that is now ancient history.

With increasingly fractured audiences and incredibly sophisticated targeting capabilities, the value of TV is defined by far more than just the raw number of households and/or people tuning in. In connected TV environments, advertisers are able to speak directly to their most likely buyers, even with “smaller” viewership.

The idea is central to Amazon Prime Video’s value proposition as it has progressively positioned itself as a larger part of the sports rights conversation. The NFL and NBA are both losing raw viewers by leaving traditional TV to air games exclusively on a streaming service like Prime Video (Or Peacock or Netflix or Paramount+). But they’re gaining the ability to sell ad inventory at a premium that reflects the hyper-targeted nature of the reach provided by sports programming.

For instance, recent data published by iSpot shows that the NBA Playoffs reached 44.9% of quick-serve (QSR) visitors in the U.S. from April 19-June 22. No other TV programming topped 31%, highlighting how QSR brands derive particular value from airing ads during those games – driving up the value of that inventory for those buyers, as well as the league and its broadcast partners. The NBA also reached 28.7% of U.S. consumers in the market to buy a car during the playoffs (No. 1 among all programming in the timeframe).

If you’re a QSR brand or an automaker, understanding this sort of data is far more critical to deeming advertising a “success” than how many people tuned in. Instead, the focus has been shifting to how you can convert the highest share of those that watched into paying customers.

Streaming Supercharges This Shift

As mentioned, audiences and attention are shrinking, as today’s programming has to battle not just a never-ending list of channels and streaming services offering live entertainment, but every show and movie ever produced, YouTube and TikTok clips, plus video games and other media, too.

The fact that any programming – sports or not – can cut through that clutter and reach 10 million or more households is frankly miraculous at this point. And that’s why the focus on ratings makes increasingly less sense. It’s a metric that lacks bearing for the advertisers actually keeping this programming on the air.

This becomes even more apparent the more sports rights shift to streaming, where ratings can become a bit of a black box.

Netflix provides weekly cutdowns on views and watch-time, but only as a top-10 list (the more extensive glances into behaviors come every six months). Amazon Prime Video and other NFL partners largely limit their audience sharing to league-related events. Apple TV+ doesn’t share much at all around its live sports tune-in for MLS games – unless, similar to other services, it’s great news and then you’ll start to see some numbers.

These are not knocks on the services, as much as they’re just used to point out the realities of the situation: These services are largely post-ratings. So why are we talking about sports in these terms when they’re increasingly living (sometimes exclusively) on streaming services?

This Fall may be the final nail in the coffin, however.

Once a third of the NBA’s national TV inventory lives on Prime Video, Netflix is again airing NFL games and ESPN’s standalone streaming app are all realities, too much of the sports landscape will exist behind walls where ratings are less relevant.

That doesn’t mean you can’t or shouldn’t try to measure the programming or advertising. It just means the metrics need to take on more nuance and precision to derive tangible value from them.