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Will NFL Ad Changes Reverse Falling Ratings?

Variety logo Variety 5/18/2017 Daniel Holloway
© Provided by Variety

As TV-network upfront presentations wrap up today in New York, the NFL is readying new tactics against an unfamiliar opponent — ratings decline.

In March, league commissioner Roger Goodell announced several on-field and broadcast changes designed to improve, as he put it in an open letter to football fans, “the flow and pace of the game.” Among the steps the league would take were adjustments to the length and frequency of commercial breaks.

“We know how annoying it is when we come back from a commercial break, kick off, and then cut to a commercial again,” Goodell wrote. “I hate that too.”

Getting rid of what Goodell calls the “double-up” is just one experiment the league will engage in this fall after watching Nielsen-measured average viewership decline 8% in 2016 from the previous season. That decline was part of a broader ratings downturn for live sports, one that also affected the NBA, NASCAR and Major League Baseball. If the NFL’s ad changes can help reverse its ratings course, other leagues will take note — and broadcast partners who had to be sold on the new strategy will be assuaged.

Next season will see the standard number of ad breaks in an NFL game reduced to four a quarter from five or six. To compensate, the length of breaks will increase from one minute, 50 seconds to two minutes, 20 seconds. The league also plans to reduce the number of in-game sponsor shout-outs, and introduce a format that will show screen-in-screen footage from inside the stadium while a commercial plays.

Those changes could not have been made without the assent of the league’s TV partners — including CBS, ESPN, Fox and NBC. Those networks each pay nine to 10 figures per season to broadcast NFL games. They do so because the NFL offers an advertising opportunity unlike any other.

“The NFL is a very unique television experience — and by ‘unique’ I mean absolutely crazy,” says Windy Dees, a sports-administration professor at the University of Miami. A 2010 analysis by the Wall Street Journal found that ads took up roughly one hour of an average NFL game’s three hours and 12 minutes. That’s compared to 11 minutes of actual football action per game.

“The NFL knows that right now you’re tuning in to three-plus hours of an NFL broadcast, and primarily you’re watching ads,” Dees says. “It’s amazing that everyone in this country loves watching football. We’re basically tuning in and being a captive audience for the NFL’s broadcast partners.”

If, as Goodell appears to believe, ratings declines indicate that football fans are no longer quite so willing to remain captive, then the league has begun to be affected by a larger trend away from ad-supported programming. Streaming services such as Netflix and Amazon have accustomed viewers to commercial-free experiences. In response, cable networks such as TNT and National Geographic have reduced the ad load for original programming.

For broadcasters, the NFL’s changes should be a wash, providing roughly the same amount of commercial opportunity per game. At stake is an enormous chunk of television ad revenue — $3.5 billion in 2016, according Standard Media Index, up 3% from the year prior, despite falling ratings. “If the number of minutes you’re offering to advertisers ends up being less, then obviously channels would be concerned about how much money they can generate,” says SportBusiness Group’s Steven Slayford.

But any strategy that broadcasters believed would threaten revenue streams would not have passed muster.

“We’re in constant dialogue with the league regarding how we can enhance the viewer experience, and we both believe this new change will do just that,” an NBC rep told Variety. “As it relates to sales, what’s good for fans is good for advertisers. We anticipate navigating this change without any impact on our ability to sell primetime television’s top two programs.”

There are reasons for NFL broadcasters to hope that 2015-16 was a ratings outlier. The presidential election pulled eyeballs to cable news and challenged any marketer trying to promote anything else. The Chicago Cubs’ World Series-winning postseason run and the Rio Summer Olympics were also powerful draws.

Facing a more normalized television landscape, the NFL could be primed for a viewership comeback in 2017. With ratings for the league’s premiere events still outperforming the rest of television — four of 2016’s 10 most watched programs were NFL-related — it can afford to tinker with product presentation.

“They’re in a very strong position,” Slayford says. “I think other leagues are looking at them, but they’re not quite in a position of strength like the NFL is, to make such a bold, quick decision.”

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