Exploring the Value of Virtual Advertising
Almost unheard of 10 years ago, rights holders are rapidly adopting virtual advertising technology, particularly in top tier sports. But why? What is the value of virtual advertising in live sports? Who exactly does it benefit and how? Here we look at how the adoption of virtual advertising technology can benefit different stakeholders like sports rights holders and brands. And what about the sports fans themselves? Is there anything in it for them? Let’s explore…
With virtual advertising…
… Rights holders can offer more value to sponsors
Brands have more marketing and promotional channels available now than they ever have before. With everything from print and outdoor advertising to sponsored social media content and live video open to them, marketers are tasked with finding those channels that will result in the greatest return on investment for their brands.
So why would marketers pick sports sponsorship as the best way to gain brand exposure? Well, sponsorship of live sports has always been a hugely powerful way to foster an affiliation between sports fans and brands, and brands undoubtedly benefit from the prestige of being associated with top tier sporting events and entities. Now however, with the number of different marketing channels available and the level of targeting offered, particularly by digital channels, sports rights holders might need to up their game if they want to capture that precious marketing budget.
Virtual advertising helps rights holders to offer more bespoke sponsorship packages to their clients, and the brands themselves can choose only to market to the audiences they consider to be most relevant or valuable to them. This level of targeting goes far beyond what is currently possible within live sports sponsorship.
… Brands can align messaging with local campaigns and in local languages
It’s more noticeable than ever how global sport has become. Almost every top tier league has seen its fan base in international markets grow over the past decade. This became particularly evident during the 2021 European Cup, when there was a great deal of commentary and discussion around the number of Chinese brands visible around the stadium. But of course, there was good reason for this, European football has a huge viewership in China – why wouldn’t brands choose to capitalize on that?
It stands to reason that advertising is most effective when the target audience resonates with either the messaging or the brand itself. Virtual advertising enables brands to target only the most relevant markets to them. This unlocks opportunities for smaller brands, for whom sports sponsorship was not possible due to the high cost-barrier to entry. With virtual advertising, these smaller or local brands can invest in the virtual inventory for their target market, leaving the inventory in the additional broadcast feeds free for other brands to take advantage of. Local brands can create sponsorship messaging in the language of their target audience, or even include other market-specific information such as pricing or vendor locations.
Larger global brands also stand to benefit. With virtual advertising, a global brand can create tailored messaging for each of its markets, aligning its messaging with marketing campaigns running in certain locations or translating its messaging for different audiences.
… Rights holders can maximize the commercial potential of tv-visible signage
Virtual advertising helps sports rights holders to maximize the commercial potential of sponsorship inventory and potentially generate more sponsorship revenue in several ways.
Sponsorship inventory within sports venues is typically restricted to certain areas and positions, such as perimeter LED boards, often for safety reasons such as ensuring the playing surfaces remain free of physical obstacles like cam carpets. Virtual advertising enables the placement of virtual content onto otherwise empty surfaces. The advertising is not visible to the fans or players in the stadium but only to the fans watching the broadcast. This also enables rights holders to increase the amount of inventory in the venue beyond what is physically available, by placing additional virtual advertising content onto surfaces such as the playing surface or even within the stands.
Virtual advertising also involves placing virtual content over existing physical inventory, so rights holders can sell the physical advertising space to multiple different sponsors, who may only be interested in reaching certain specific markets.
… Rights holders and sponsors can better manage restricted or “dark” markets
Markets throughout the world have differing rules and regulations when it comes to advertising. Such restrictions commonly apply to products and services related to gambling, alcohol, tobacco and junk food, amongst others. There are also restrictions in some markets regarding the amount of advertising that can be shown within a certain physical space or period of time.
Virtual advertising can help sponsors and rights holders manage these restrictions, by showing only permissible advertising in certain markets. For example, in France, the advertising of alcohol is not permitted within live sport broadcast. If an alcohol brand wished to sponsor a football game that was to be broadcast in France, they could do so with virtual advertising content, and the rights holder could offer the remaining inventory to another sponsor looking to target the French market.
And for the fans?
At the moment, it is essential that virtual advertising be indistinguishable from physical advertising in the venue. Why? Because for the consumers of live sport, although there is a general understanding there that fans will be advertised to, no one wants the advertising to distract them from the game itself. For that reason, the virtual advertising needs to mirror, as much as possible, the kind of advertising fans are used to seeing in sports venues. It could be argued that it is more valuable for fans to see advertising in their own languages and for brands that are relevant to them, but if you were to ask a fan they might not see it that way.
However, there’s a possibility that this general stance of “sponsored messaging = bad” could be set to change. The increasing popularity of OTT and live streaming services means that sooner rather than later we might see personalized in-game messaging being introduced. An example of this might be the perimeter boards in a football stadium featuring advertising messaging targeted to individual viewers, rather than segments of the audience. This kind of development has the potential to unlock novel use cases. One can imagine individual “Happy Birthday” greetings flashing across the LED signage when viewed on an OTT platform, or fans themselves submitting messages, selfies or other user generated content to be displayed live within the studio.
Would this be of value to fans? One can see the potential for this technology to forge a more deeply rooted feeling of connection between the fan and the club. User generated content has exploded in popularity in recent times, due to the value it provides to both the consumer and the brand, creating loyal fans and communities and providing the fans themselves with the chance to be a tangible part of the event.
Streaming and OTT services are increasingly adding advertising to their platforms where none existed before. This move could create a huge backlash among users, who consider their paid subscription to these services to free them of any obligation to consume additional advertising. Virtual advertising technology has the potential, within live sports streaming at the very least, to insert non-intrusive and non-interruptive advertising into the game, perhaps offering a good middle ground between the revenue-building objectives of the OTT and streaming platforms and the amount and type of advertising that is acceptable for the viewer.
So, what is the value of virtual advertising?
The real value of virtual advertising comes from the options it provides rights holders and brands to problem solve and innovate.
Virtual advertising helps rights holders to maximize sponsorship revenue, helps to position them as trailblazers in the industry and helps to mitigate or solve the many new challenges that come with the advance of digital technologies and streaming platforms, and perhaps most importantly, it enables rights holders to offer the same help and opportunity to their own valued clients – the brands.
Interested in learning more about virtual advertising?
Get in touch with the team.