Twitter sets sight on huge ad revenues for NFL content (TWTR)

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Twitter is reportedly looking to sell ad packages for its NFL game streams at a price tag of $2 million to $8 million per advertiser in the hopes of fetching $50 million in total ad revenue from the games, Recode reports.

Ads that are offered range from in-game ads that will appear during the actual game, pre-roll ads that appear ahead of all NFL highlights (not just NFL Thursday games), and branded content across Periscope streams.

If Twitter can achieve or surpass $50 million in ad revenue for the games, this would be a huge gain for the company. Twitter paid only $10 million for the streaming rights to 10 NFL Thursday Night Football Games —much less than the $20 million that Yahoo paid for the rights to stream a single Sunday game last year. And in Q1 Twitter brought in $595 million in ad revenue without NFL games, suggesting that the NFL ads could add a nice boost to Twitter's top line. 

But there is some concern that Twitter may miss out on its ad revenue projections. Last year, Yahoo sought $150,000 per ad spot in the stream, but sold some at half that price, according to the Wall Street Journal. 

However, Twitter’s digital marketing proposition to brands is likely more attractive than Yahoo's for two key reasons:

• Attract a massive off-screen audience that they cannot reach on traditional TV. Twitter’s NFL streams are expected to attract over 800 million registered and nonregistered users worldwide to the platform, according to the NFL. More specifically, the streams could help advertisers reach audiences, particularly younger audiences, who are increasingly shifting their TV-consumption habits from traditional TV to over-the-top (OTT) platforms.  Among Americans age 18-24, the weekly average time spent with traditional TV sunk 34% from Q4 2011 to Q4 2015, according to Nielsen and cited in BI Intelligence’s Future of TV report.

• Connect with consumers through live conversations. Twitter’s positioning as a premiere destination for live conversation is one of the main reasons why the NFL chose Twitter as its digital streaming broadcast partner. For this year's NBA Finals, for instance, 24.2 million tweets were sent during the live games, with 8.4 million tweets during Game 7 alone, making it the most tweeted game in NBA Finals history. Brands will now be able to do all of their communication with fans without leaving the video and conversation stream. This enables brands to engage with consumers in a way that is spontaneous, authentic, and intimate. 

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