Sports, the global ad market and uncertain economic conditions

February 25, 2023
While ad revenue is projected to increase by 4.8% in 2023, growth in ad spend is expected to slow and some media companies are falling behind on their Q1 targets.
Sports BusinessGeneral

📈 Bucking the trend

Sports aren’t immune to broader ad market trends, but despite a downturn in spend last fall, the sports industry’s competitive advantage helped it bounce back. “It's still appointment viewing,” said Optimum Sports managing director Kristen Gray.

  • Sports programming accounted for 94 of the top 100 U.S. broadcasts in 2022 and boasts a unique pull compared to other ad-supported content.
  • “It looks like all ad spending is down,” Gray added. “So much of entertainment is now behind a paywall, and [in] sports, we can't move to that environment. It has to be in an ad-supported environment. It's where the reach is.”
  • “We're seeing a lot of clients really move their dollars into sports,” continued Gray, and especially into women’s sports. She said overall ad spend increased 50% over the last five years, and that her clients’ spend jumped 46% compared to last year around ESPN’s women’s hoops coverage.

The hype isn’t exclusive to broadcast, either. Lauren Funke, head of ad marketing at The Athletic, said women’s sports “come up in every conversation” since the sports publication launched ads in September, even when “speaking to a brand about something completely different.”

  • Interest has only increased since The Athletic inked a women’s sports–centric deal with Google in November. “I think 2022 [was] a very big year for the awareness of the impact that [a sponsor] can have, just in terms of the coverage itself,” Funke added.

Women’s sports have cultivated impressive reach in recent years, which makes ad placement an attractive prospect. “We're looking at this as women's sports versus men's sports, not even thinking about entertainment, which is traditionally where our clients invest to reach a female audience, but you don't have to do that anymore,” Gray said.

  • She added that popular women’s sports events draw larger audiences than some primetime shows, and last year’s patterns agree. The Oscars was the only entertainment show to crack the top 100 broadcasts last year, and many premium channels, like TNT and TBS, average less than 1M nightly primetime viewers.
  • As Funke describes it, “the women's sports audience is increasingly more diverse and younger and I think that's also an opportunity for brands to stay relevant and also support the message about equity.” Inclusivity always wins.

📅 The year ahead

The 2023 women’s sports calendar is stacked with events poised to draw major audiences and major brand presence. Gray expects increased spending around March Madness in the future and noted that companies are interested in July’s FIFA Women’s World Cup (WWC) in Australia and New Zealand despite the massive time difference.

  • Gray also said Optimum is already planning for next summer’s Paris Olympic Games, an event in which American women athletes often dominate the podium and airtime.

Excitement around tentpole events isn’t the only reason ad spend is trending upwards. “There's more [women’s sports] on air, there's more places to spend money,” Gray said, and Funke agreed: “Bringing in new lines of coverage brings in new audiences,” which provides brands with new marketing opportunities.

  • Audience and brand interest also presents The Athletic with the possibility of new offerings, according to Funke. “How can we take this and move this across formats, in audio, newsletters as an example, video?” Sky’s the limit.

Women’s sports will need to improve visibility (as mentioned in last month’s Sports Biz Breakfast) before they can fully capitalize on brand interest. “There's still a long road ahead even for us from a measurement perspective with some WNBA on Facebook Watch and NWSL on Paramount+, they're not Nielsen rated,” Gray revealed, “but I think we’ll get there.”

In the meantime, major events with easy-to-access broadcasts will define conversations about women’s sports potential. Case in point? The WWC. “You're going to see other female and male brands that are just going to want to be around it as the big event of the summer,” Gray said.

  • Funke went one step further. “I think the WWC is going to be a very defining moment … being able to put that weight of a newsroom behind WWC, I just think that's going to even blow the doors wider open.” July can’t come soon enough.

🏀 By the numbers


March Madness and the WWC aren’t the only events to circle on your calendar this year. The WNBA made incredible strides in audience growth in 2022, bringing advertisers more bang for their buck than ever before. According to Relo Metrics, this impact also carried over to the league’s social media following.

💰 $212: The average sponsorship media value (SMV) per TikTok post from the WNBA, the most of any social media platform in 2022. The league also generated 5.2K average engagements from each post.

📲 58%: The YoY raise in Instagram engagements per post, while Facebook and Twitter increased 48% and 33%, respectively. Higher SMV can be attributed to the WNBA’s larger audience, and it’s no surprise that the league is going viral — social media has driven the rise of women’s sports.

📈 48%: The YoY increase in SMV per post on Instagram and Facebook. The league also saw a 2% jump in SMV on Twitter in 2022. Swish.