Twitter Vs. CBS: Which Is Better For Thursday Night Football Advertisers?

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TWTR: Twitter logo
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Twitter (NYSE:TWTR) has successfully live streamed the first four Thursday Night Football (TNF) games to date as part of its $10 million deal with the National Football League (NFL) to stream all ten TNF games this season. The response from fans and commentators has been extremely positive with respect to the live sports streaming experience, which combined the worlds of live sports and real-time fan chatter. However, Twitter’s viewership numbers lag far behind those of CBS (NYSE: CBS) – official TV partner (2016/17) for the NFL, along with Comcast (NASDAQ: CMCSA) owned NBC. Therefore, it is important to analyze Twitter’s live streaming performance not only in terms of the quality of its stream but also in terms of its viewership numbers.

Why Stream Quality Matters

Providing a glitch-free streaming experience with TNF is very important for Twitter, considering live-streaming is being touted as Twitter’s biggest bet to turn things around in terms of its top line and user base growth. This is also being seen as a test run for Twitter’s recently signed deals with several companies to live-stream events on its platform, including 120 Sports, Bloomberg TV and the other major sports leagues in the U.S.- Major League Baseball (MLB), the National Hockey League (NHL) and the National Basketball Association (NBA).

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Twitter’s average monthly active users (MAUs) grew just 3% y-o-y and 1% quarter-over-quarter to 313 million in Q2 2016. The company’s struggle to grow its active user base has been the primary investor concern for the past five quarters, and the company recently started focusing on video to attract new users through its different offerings such as Periscope, Vine and live-streaming.

TNF Viewership: Twitter Vs. CBS

In the first TNF game played September 15, CBS recorded viewership of 11.44 million people, 29% down from last year but still far more than the 2.35 million reported by Twitter. However, comparing these metrics alone is not fair to Twitter considering the limited marketing by Twitter for its TNF feed and the loyalty of traditional viewers to TV.

It is important to understand that the foremost objective for Twitter was likely just to display its ability to stream live sports events on its platform without any glitches. It is therefore not a surprise that the company did not excessively publicize its new feature in the beginning and focused on the quality of its live feed. In this context, its 2.35 million figure for the first game was a good start considering this metric has since grown 32% to 3.1 million (for the Oct 6 game).

Viewership = Ad Dollars

The excessive focus on viewership for live sporting games is all about ad dollars. Earlier this year, CBS and NBC agreed to pay a combined $450 million per year for two years to broadcast 5 TNF games each this season. That translates into a spectacular $45 million per game. Such high spending by networks gets justified by the ad dollars generated during these games considering the total audience for the first TNF game on CBS last year was over 16 million. CBS is believed to have charged an average of $560,000 for a 30 second slot in TNF this season and all slots were apparently sold out without any hassles. [1] On the other hand, Twitter spent an average of $1 million per game for rights to stream 10 TNF games this season.

Compared to the $560,000 per 30-sec ad slots on CBS, Twitter charged companies $1-8 million for the whole season. A recent report in the Wall Street Journal stated that for $5 million, advertisers could get two ad slots per game along with video time on several game clips through the week. [2] Information around advertising costs for companies during games provides a good context for comparing Twitter’s TNF viewership with CBS. As shown below, the former isn’t too far behind CBS is giving value for money to advertisers.twtr-12

The above figure shows that ad dollars spent by advertisers per viewer per commercial during TNF games this season was 5 cents on CBS versus 12 cents on Twitter. This data also tells us that advertisers will be able to draw better value for their ad dollars through Twitter than CBS if the number of viewers on Twitter rises over 5 million. Considering TNF’s viewership on Twitter crossed 3.1 million last week (which translates into 8 cents per viewer per commercial), it isn’t an outlandish idea that Twitter could provide better value for money than CBS towards the end of the season. We will be keeping track of these developments.

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Notes:
  1. NFL Ad Rates Soar as Marketers Clamor for Time in TV’s Last Great Reach Vehicle, Sep 10 2016, Advertising Age []
  2. Twitter Faces Crucial Ad Test With Live NFL Broadcasts, Sep 12 2016, WSJ []