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By Alexandra Bruell
Advertisers who purchased spots on Amazon's NFL telecasts are sizing up the platform's potential, and determining how best to exploit it.
It's an important test for Amazon as it ventures into live sports and tries to become a digital advertising powerhouse.
For some, the appeal is Amazon's promise of "attribution," the idea that the company can show that ads led to an increase in brand awareness or online store sales, including on Amazon.com. Marketers crave that data and have gotten uneven results in television. For others, the big draw is the affluent audience -- NFL games can only be viewed by subscribers to Amazon's $99-a-year Prime service.
"It's an opportunity to partner with Amazon and to understand, over the course of the season, Amazon consumers, NFL content, and how they may or may not interact within Amazon's core platform of e-commerce," said Tom McGovern, president of Optimum Sports, a sports media and marketing agency owned by ad giant Omnicom.
Sling TV, which sells an online package of cable TV channels and sees potential overlap with Amazon's streaming audience, was among the advertisers that bought an Amazon NFL ad package. Other advertisers include Showtime, Gillette, Pepsi and Hyundai.
"Part of the incentive is that these Amazon Prime users are affluent; they're folks that purchase things online, and we think and we're pretty sure that they're also more likely to watch streaming," said Warren Schlichting, executive vice president of marketing, programming and media sales at Sling TV and parent company Dish.
Amazon sought $2.8 million for a package that included inventory in each of its Thursday night games, as well as other ad inventory across Amazon's platform. There were skeptics among advertisers and not everyone went all in: some advertisers paid around $1 million less than the original asking price, according to people familiar with the deals.
Amazon has been using video as the tip of the spear as it tries to become a bigger player in digital advertising. The online retail giant generated $1.1 billion in U.S. digital ad revenue in 2016, a small sum compared to Google's $29.4 billion and Facebook's $12.4 billion, according to eMarketer. But the e-commerce giant is viewed on Madison Avenue as an emerging rival to the so-called "duopoly," due to its powerful data and deep pockets.
"We're very happy with advertiser response and are sold out," said an Amazon spokeswoman in a statement regarding its NFL streaming effort. "Our focus is now on execution and, with our advertisers, learning from the results we see throughout the season."
Amazon paid $50 million for the rights to stream 10 Thursday night NFL games, alongside television broadcasters CBS and NBC, which are splitting the season schedule. Amazon has access to 22 spots per game, including pre-, post- and in-game ads -- inventory that on traditional TV goes to local broadcast stations.
Some ad buyers were skeptical about Amazon's ability to attract a big NFL audience, describing the buy as an "experiment."
After its first game on September 28th, Amazon said that the average worldwide audience watching Thursday Night Football on Prime for at least thirty seconds was 372,000. In the second game Amazon aired, the average audience grew to 391,000.
By comparison, CBS and NFL Network's television coverage of the two games averaged about 15 million viewers, according to figures from CBS.
Mr. McGovern of Optimum Sports said "none of this is about mass reach," but rather Amazon's audience data prowess.
Some advertisers rebuffed Amazon's ad packages, largely due to the requirement to buy non-NFL Amazon ad inventory such as display and video ads on Fire TV, Amazon.com and Amazon Prime's TV shows.
"They're packaging everything and the kitchen sink," said one ad buyer, describing the package as an "Amazon partnership opportunity that included NFL."
In some cases, media buyers that didn't have clients that sell products on Amazon were also uninterested, since the Amazon data and research promised as part of the ad deal would be less valuable to them.
An Amazon spokeswoman said in a statement, "We don't share pricing or package details as a matter of policy -- but can tell you that we offered a range of options at various price points depending on advertiser objectives, which may include additional Amazon media placements."
Amazon is so far drawing a larger audience than last year's Thursday night streaming partner, Twitter, which averaged 270,333 viewers throughout the 2016-17 NFL season. And there are indications people are watching Amazon's games longer: viewers watched its first game for an average of 55 minutes, compared to 22 minutes for Twitter's first contest.
One ad buyer said Amazon NFL spots are more costly than TV ads on a cost-per-thousand-impression basis (a common industry metric), even though total spend on TV ads is greater -- a reflection of the premium for the Prime audience.
As part of the deal, Amazon discussed delivering custom research for advertisers that could show, for example, how users reacted to an ad on Amazon.com, including whether they made actual purchases on the e-commerce site. So far, many advertisers have yet to receive those reports.
Buyers aren't expecting to see results in the short term.
"This is about a season-long understanding of how consumers engage in the content and in the broader platform," said Mr. McGovern.
(END) Dow Jones Newswires
October 12, 2017 14:28 ET (18:28 GMT)
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