Why CTV Sports Is the MVP For Advertisers

The Rise in Sports Streaming

While Connected TV continues to rise in popularity with TV viewers, sports has remained a popular tentpole of the linear TV model. Despite 82% of American households having at least one internet-connected device, and the average American subscribing to at least four streaming services, sports viewership continues to dominate TV viewing. In fact, sports are the most popular programming on broadcast TV. While news makes up for 6 of the 100 most-watched primetime broadcasts, sporting events capture 61 of those top 100 slots. 

Most Americans aren’t necessarily thrilled to be watching sports on linear TV, however. 44% of cable TV subscribers say they would cancel their service if they could access sports from streaming. It’s this grip on the sports market that has kept linear TV from seeing a higher amount of cord-cutting viewers; research firm MoffettNathanson discovered that most of the audiences abandoning linear TV for CTV “appear to be consumers who aren’t classified as sports viewers.” 

That’s not to say that there isn’t demand or desire for more sports on streaming. The category ranked third in “most alluring content” for streaming services in our most recent Peeks poll.

In recent years there have been a few fissures starting to show in linear TV’s concrete hold. According to The Trade Desk’s Future of TV Report, nearly 39% of viewers primarily watch sports via ad-supported CTV platforms or social media—a number that matches the 39% who still watch on cable. And eMarketer predicts that by 2025, it’s estimated that 118 million U.S. viewers will stream their favorite sports, an increase of 71% compared to 2021. 

This sea change comes at a turning point for TV viewing, media companies’ investment in sports, and sports advertising being more valuable than ever. 

Brands Go Mad For March Madness

While 2022 saw a record-breaking advertiser turnout for the NCAA March Madness tournament, this year blew it out of the water. Ahead of Selection Sunday on March 12th, Warner Bros. Discovery and CBS celebrated its advertising inventory being “virtually sold out” and “significantly” surpassing 2022’s $1 billion revenue on both its streaming and linear TV options. 

In recent years the tournament has become bigger than ever for both viewers and advertisers, with over 100 million viewers—or 65% of US households—estimated to have tuned in and watched an average of 9.25 hours.

Viewers, and advertisers, had more options than ever as well, with CBS All-Access and Paramount+ providing options for streaming the game. These streaming networks have seen a viewership increase of 86% compared to the period prior and reach nearly 2.5 more households per commercial than the average program. 

This year’s successful March Mardness turnout helps to drive home just how important sports has become to the modern TV ad market. Despite the slumping TV advertising market, sports ads remain an outlier—continuing to boom thanks to a dedicated fandom and sizable audience. 

Despite the slumping TV advertising market, sports ads remain an outlier—continuing to boom thanks to a dedicated fandom and sizable audience

In the past year, major entertainment, media, and technology companies have been on a downsizing binge—and blaming a “weak” advertising market in the process. Now Bloomberg Intelligence estimates that this year’s NCAA March Madness will bring in $1.2 billion in ad revenue—an increase of 8% from last year. 

The potential of an 8% gain has media companies sitting up and taking notice, especially as many of them are seeing flattened ad revenue year over year. In response, many are doubling down on sports—including signing deals that bring it to streaming. 

The Allure of Sports Streaming

Sports are increasingly following its cord-cutting fanbase to CTV. As these streaming technologies continue to improve and more media companies invest in CTV, the sports vertical has skyrocketed in popularity. 

Now almost every major streaming service has some sports-related content, with major players like Apple and Amazon signing multi-billion dollar deals to secure exclusive streaming rights—and rumored to be investing even more.

Examples of this include Amazon Prime paying $1 billion per season for rights to stream NFL “Thursday Night Football,” AppleTV+ securing the rights to MLB “Friday Night Baseball” and MLS games, and HBO Max acquiring US women’s and men’s national soccer team matches for 2023. Some leagues and regional sports networks are even launching their own services.

At the same time, these major services are undergoing two seismic shifts. 

First, between economic inflation, the need to recoup their investment in content like sports, and the natural lifecycle of a subscription model, streaming services are raising their prices. Second, in an attempt to generate more revenue and mitigate churn by offering lower-cost alternatives, they’re embracing ad-supported streaming.

As a result, one of the last bastions of linear TV is moving to an increasingly ad-friendly, fully targetable, and lucrative entertainment platform. And that has both media companies and advertisers celebrating. 

Shaping Consumer Behavior

This increased accessibility to sports is already having an impact on the marketplace. Streaming services’ spend on sports rights globally is projected to reach $8.5B this year alone, a 64% increase from 2022—with North America leading the charge.

Now CTV’s share of sports rights in 2023 will encompass 21% of the global share, an increase of 13% in just a year. 

Now CTV’s share of sports rights in 2023 will encompass 21% of the global share, an increase of 13% in just a year. 

This year’s World Cup proved to be an excellent example of what this new streaming sports environment looks like for brands, viewers, and broadcasters. Telemundo reported a total audience delivery (TAD) increase of 24% from 2018, with a 209% increase in viewership on streaming platforms including Peacock. Overall streaming numbers comprised 26% of the total viewership, shocking pundits.

Further, brands leveraged this new platform to not just reach a wider audience, but better understand how to communicate with them. This year’s tournament, held in Qatar, was surrounded by controversy and geopolitical conflicts playing out on a global stage. 

To accommodate a potentially volatile environment, brands stuck to feel-good messages designed to delight and inspire—and relied on the digital platform’s nimbleness, knowing they could update creative quickly or adjust campaign deployment to navigate any unforeseen challenges.

This strategy shift represents one of the many reasons that advertisers are as keen as media companies to embrace a CTV sports future. While comprehensive targeting and real-time analytics are attractive, today’s brands are more risk-averse thane ever and increasingly finding themselves caught up in controversial, and potentially brand-damaging, headwinds. 

While linear TV models don’t allow for a lot of flexibility and can take weeks for creative to be updated, the CTV model is becoming increasingly attractive for sports advertisers who are navigating a more perilous 21st-century landscape. 

Conclusion

Sports’ increased migration to CTV couldn’t happen at a better time for budget-slashing media companies and advertisers looking to increase their reach. This mutually beneficial arrangement is poised to not just make sports advertising more valuable than ever, it’s likely to continue accelerating a live-sports future on streaming services.