April 27, 2015
Back in January, YouTube closed a deal with the National Football League to set up an NFL channel on its video platform, offering viewers game previews, highlights and more. In anticipation of the next season, YouTube is looking to capitalize on its NFL programming to secure lucrative advertising deals. The tech giant has set its NFL ad package at $5.2 million for the entire season, on the condition that marketers also commit to paying that same amount to enlist in its Google Preferred program.
Under these stipulations, “the overall cost of a package covering the football season from September 10 to February 14, therefore, is $10.5 million, with roughly half the money earmarked for Google Preferred inventory,” explains The Wall Street Journal.
The Google Preferred program, which launched last year, reserves ad space for marketers around YouTube’s most coveted videos. Ads on YouTube typically appear on screen as 15-second pre-rolls, playing before viewers watch their videos.
YouTube is merely adopting a strategy that has been in use by TV networks even before YouTube ever existed. “Professional sports content including big events like the Super Bowl has long been used by TV networks to woo advertisers into agreeing to buy bigger ad packages,” notes WSJ.
YouTube’s previous attempts at luring advertisers include its offering of higher value ad inventory. Marketers were given the option to pay a premium to secure ad space around top quality video programming as opposed to most of the miscellaneous content that exists throughout the platform.
With this proposal, however, Google runs the risk of disrupting the NFL’s relationship with existing NFL advertisers, those that pay top dollar for television ad space.