<em>Source: </em><a href="https://www2.deloitte.com/uk/en/pages/sports-business-group/articles/annual-review-of-football-finance.html"><em>Deloitte </em></a>
The Signal: Staying with the soccer (or as our international audience is screaming, “football”) theme, The Economist recently published an interesting article looking at virtual ads. This technology works by “placing invisible infrared signals in signs to distinguish them from other objects in the foreground… images can then be superimposed onto them in a live TV broadcast.”
Below is an example of the same sign showing one in-stadium ad and different virtual ads (seen either on TV or online). The appeal of this business is that ads can be tailored to regional locations where viewers are watching from, which greatly expands the ad inventory for live sports.
Virtual ad technology allows a single billboard to show multiple ads that differ from in-stadium to video (ADI)
Moving forward, the key metric driving the virtual ad business will be “commercial income” (comprised of sponsorship and advertising) across professional sports leagues.
As a proxy, Premier League Club (European football league) commercial revenue has risen 30% over the past 5 years to nearly $2B. A sports-marketing company cited in The Economist article estimates that commercial revenue for European football could increase 40% in the coming years.
Pro basketball and hockey teams have adopted similar technology, with perhaps more to come.
The Opportunity: Here are 3 opportunities in the virtual ad space.
- Sell Virtual Ad Solutions: Broadcast Virtual bills itself as the “largest provider of virtual advertising in the world.” The firm’s various offerings include:
- Virtual ads, which include 1) virtual paint; 2) virtual mats; 3) virtual billboards; 4) virtual LED. All of these services expand the “ad inventory” for live sports events.
- Sponsor analytics, which measure the quality and performance of ads.
- Sign replacements, where the firm physically replaces old signs for new signs that can enable virtual ads.
Clockwise from top right: 1) virtual mat; 2) virtual mat; 3) virtual billboard; 4) virtual paint (Broadcast Virtual)
- Create on-field VR teams: A 2018 job posting for Broadcast Virtual calls for a VR Computer Field Technician that is “a technical role that requires working on site at various stadium locations.” Even though the virtual ads are implemented digitally, there is still a need for on-field presence to properly set up related hardware (e.g., cameras). There’s an opportunity to create a team that specializes in implementing hardware specifically for virtual ads.
- Partner with a sports league to sell ad inventory: With the world’s largest sports leagues well-served on the commercial side, there are opportunities to help smaller leagues sell virtual ad inventory. Here are the sports leagues with total revenues of less than $75m:
Leave a Comment