Report: Amazon seeks $2.8M for NFL ad packages

Dive Brief:

The numbers are in for what advertisers will pay to buy ad packages in Amazon’s live stream of 10 Thursday Night Football games this upcoming season — $2.8 million, according to CNBC.
Amazon gets 10 30-second spots to sell during each game, and according to CNBC Amazon’s terms include buyers running ads on Amazon.com throughout the NFL season from September to February. National spots by network broadcasters will also run on Amazon’s live streams and Amazon’s spots will replace the local ads running on network and cable broadcasts of the games.
Last season Twitter won the rights to stream NFL Thursday night games with a $10 million bid and its ad packages ran from $2 to $8 million which included spot on NFL highlights along with the games.

Dive Insight:

To put the Amazon number into some perspective, last year, the cost of ads in live NFL TV broadcasts reached an all-time high at approximately $717K per unit, according to Ad Age. Packages during the 2015-16 season saw top-spender Verizon spend $132.1M.

The CNBC report pointed out that it’s not clear if Amazon will be able to recoup its investment through ad sales. Although Amazon’s winning bid for this year’s slate of live streamed games was $50 million, the actual cost of the deal is probably closer to $80 million as Amazon reportedly kicked in $30 million in free marketing and promotion across its properties for the NFL.

However, turning a profit via ad sales may not be the point of the content. Amazon could be using the content to lure more people to its subscription service Amazon Prime and Amazon’s e-commerce ecosystem and use the NFL as a loss leader.

Whatever the goal, the NFL deal is a validation of Amazon’s strategy to continue seeking streaming sports deals and expand the reach of Prime, which currently has approximately 65 million U.S. members. It is also underscores how Amazon is starting to become a force in digital advertising. Earlier this week, WPP CEO Martin Sorrell pointed to Amazon's deal to buy Whole Foods will change how agency holding group's clients control and think about budgets since Amazon would have access to its current trove of online consumer behavior along with the offline consumer insights provided by Whole Foods shoppers.