Fox, Netflix Built Sports Ad Deal Not Based on TV Ratings

Nearly every commercial that runs on TV is backed by a guarantee of how big an audience will watch it. Late last year, Fox and Netflix decided to throw out that rule, one of the oldest in media economics.

In November, Fox ran a two-minute-long segment during its Sunday-afternoon NFL showcase — one of the most-watched programs on TV. After one of Fox’s announcers told the audience to stay tuned for a special segment, viewers saw former New England Patriots wide receiver Julian Edelman having a conversation with film director Zack Snyder. With the help of augmented reality technology, the filmmaker quickly ushered the athlete into the world of “Rebel Moon,” the sci-fi epic Snyder wrote and directed that was released on Netflix late last year.

What audiences weren’t told is that the vignette was an experiment of sorts conducted by Netflix and its media buying agency, Interpublic Group’s Mediahub, with Fox’s cooperation. The goal was to see if Fox could prove the ad worked based not on the typical promises of Nielsen estimates of how many people saw it, but rather on a guarantee of social-media activity spurred by the unique segment. “Everyone needs to be held accountable by a metric,” says Carrie Drinkwater, the agency’s chief investment officer.

For decades, that measure has been Nielsen ratings that tell how big an audience has tuned in to a TV show, or, more recently, the average number of viewers who saw an ad break as much as a week after it initially aired. Mediahub has for several months been trying to get TV networks to consider other concepts tied more closely to a client’s actual business results.

In Netflix’ case, the streaming giant wanted to see proof that audiences were talking about Snyder’s appearance during the football game and chatting about the movie. “The guarantee was really all through social media, all platforms: Facebook, Instagram, X, YouTube,” says Mark Evans, executive vice president of ad sales for Fox Sports. “The way it was calculated was through likes and shares and retweets and comments and people posting and video views. All these different components added up to make our guarantee for this, versus an impression based on a Nielsen-rated metric.”

More advertisers are trying to tie their ads to so-called “business outcomes,” such as making a purchase, visiting a website or showroom, or asking for information to be sent about the product or service being pitched. The thinking on Madison Avenue is that knowing how many people watched an ad just isn’t enough; it’s better to understand how many people took an action that brought them closer to an actual sale. Interest has grown as the size of TV audiences has been cut down by the rise of streaming.

In recent weeks, A+E Networks introduced new measurement offers aimed at helping advertisers determine just those sorts of things. And several TV networks this year have unveiled new pacts with EDO, an analytics firm founded in part by actor Ed Norton that examines search activity tied to the appearances of commercials.

In an era when TV audiences are dwindling, determining business results driven by an ad might make marketers feel more confident in the outlets that run it. “We wanted Fox to be invested in this execution and put everything they had behind it,” says Drinkwater. “It binds everyone to the ad-sales promise, and that’s a big deal.” Fox typically seeks around $1 million for a 30-second commercial in its Sunday football broadcasts.

Fox decided to take up the challenge, says Evans, knowing more advertisers were seeking similar ideas and figuring the network could learn from the experiment. It helped that Netflix was a significant buyer of Fox inventory and that he and Drinkwater have negotiated with each other time and again over a period of many years.

Those factors clearly helped: In addition to allowing Netflix to “take over” essentially two minutes of ad time in an NFL game with a custom designed segment  — a first at the network,  Evans says, and tapping the expertise of, Eric Shanks, Fox Sports’ CEO and executive producer, who  was involved in the concept’s design. Both agency and network indicated the results were positive: The ad generated four times as much as social interaction as what had been guaranteed.

Netflix declined to make executives available for comment.

Mediahub is likely to try and strike similar deals with other media outlets. Drinkwater says she has broached the concept with sales executives at Disney, Warner Bros. Discovery and A+E Networks. “We are starting those conversations,” she says. “It has to be the right client, the right environment and the right metrics.”

Fox also remains open to such requests, says Evans. Other advertisers may want to do social-media guarantees, particularly if they need a commercial to generate consumer buzz. “Maybe it’s for a new car, a new tech product,” the sales  executive says. “It really could filter into just any category.”

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