Virtual Advertising

Television contracts are an extremely lucrative source of income for professional sports leagues. The NBA’s most recent television contract was an 8 year extension worth approximately $930M per year. (source) The NFL’s current deal is worth approximately $8.8B, and is in discussions with ESPN to sign a 10 year extension worth approximately $2.2B per year. (source). MLB’s current contract is worth around $3B and the NHL’s deal is worth $2B. What does this mean? Well with television networks paying such extraordinary amounts of money for the rights to broadcast games, they must look to advertising dollars to try to recoup this expenditure. However, with the advent of recording systems such as TiVo and DVR, more and more television viewers are fast forwarding through commercials and advertisers are losing the power to market their brands and products on TV. Moreover, it would appear that if consumers are not watching commercials, that paying to produce and air advertisements may soon be seen as a non-cost-effective manner of advertising. Well in the sporting world one technological creation that has been s successful solution thus far and may be the answer advertisers are looking for to solve this problem. Enter virtual advertising.

Here you can see the spot on a field without the virtual advertising, and the same spot with a virtual advertisement

Virtual advertising is “the seamless insertion of digitized images into a television broadcast”. (source) More simply put, virtual advertising allows broadcasters to easily cycle through various advertisements on a certain are, like the plexiglass behind the goal in hockey or the wall behind home plate, where they are only visible to people watching games on TV. This allows advertisers to still have their image or messages seen during the game without having to worry about people fast forwarding through their commercials.

Virtual advertising is not a brand new invention, but it has been catching on more and more lately throughout collegiate and professional sports broadcasting. It was first seen in MLB telecasts during the 2001 World Series. (source) This technology has been catching on in both soccer and NHL telecasts as well. The NHL has been perhaps the

Here is a shot of a SUBWAY virtual advertisement during a NY Rangers hockey game

second most active user of this technology, first sprouting up in 2009 when Madison Square Garden began implementing it during Rangers games. Since then, more NHL teams and networks have begun utilizing virtual advertising as a new means of revenue. In addition to the New York Rangers, other teams such as the Chicago Blackhawks, Philadelphia Flyers, Washington Capitals,and the Columbus Blue Jackets are now using virtual advertising. These teams are selling advertising “space on the glass behind the two goals and, in New York, an additional spot between the team benches at Madison Square Garden”. (source)

The use of virtual advertising has turned out to be a very worthwhile means of generating revenue teams as well as the networks broadcasting the games. For instance, the Philadelphia Flyers charges $3,500 per advertiser per game, and pays around $2,700 per game in production costs to operate the virtual advertising system. (source) This year, the Flyers first year using virtual advertising, the team expects to generate just over half a million dollars from its virtual advertising endeavor. (source) Companies are always searching for ways to be visible to the public and to get its messages out to the masses. Virtual advertising gives brands a new avenue to be seen during sporting events without the worry of consumers fast forwarding through its commercials and missing the advertisements. This increased exposure has been catching on throughout sports broadcasts, and it appears only a matter of time until all professional and collegiate sporting events will be adopting virtual advertising, and the brands will be all too eager to capitalize upon this new marketing venue.

Here are a few more screen shots from sporting events utilizing virtual advertising:

bcit.ca virtual advertisement during a Vancouver Canucks game

Coca-Cola ad superimposed during a MLB telecast

SPORTSNET Central virtual advertisement superimposed during a Capitols game

Green Turtle virtual ad as seen during a Detroit Red Wings broadcast