Twitter to broadcast NFL video clips as part of new ad program
(Reuters) - Twitter said on Wednesday it would carry instant-replay footage from National Football League games as part of a new advertising partnership that could boost the social media company's revenue before its highly anticipated initial public offering.
The agreement marks Twitter's biggest sports-related commitment to date for its Amplify service. Amplify was formally unveiled last May as a way for Twitter, broadcasters and advertisers to capitalize on peoples' use of social media while they watch TV - a phenomenon called "second screen" viewing.
Amplify allows broadcasters to show video clips and ads through tweets that are coordinated with what is being shown on TV.
Under the new agreement, the NFL will package in-game highlights and other video content - as well as a short ad from a marketer - inside tweets that are "sponsored" and distributed by the marketer during games. The NFL and Twitter will both receive a cut of the proceeds, although neither side would reveal terms of the deal.
Verizon is the premiere sponsor for the NFL agreement and has exclusive sponsorship rights for Amplify ads during the Super Bowl next February, the NFL said. The NFL said it expects to have another national sponsor soon.
The deal comes days after Twitter announced an agreement with CBS to carry out Amplify ad campaigns during 42 of the network's fall shows, a deal that analysts said effectively gave Twitter a small foothold in the $70 billion TV advertising market.
"Some Amplify partnerships will result in TV-related ad revenue flowing to Twitter (albeit modest amounts in total)," Brian Wieser, an analyst at Pivotal Research Group, wrote in a research note earlier this week on the CBS deal. "This becomes a better way for Twitter to insert itself into the TV eco-system, albeit with partners."
Twitter is preparing for one of the most highly anticipated IPOs since social media platform Facebook made its debut last May. The offering is expected to value Twitter at up to $15 billion.
Like Facebook, Twitter is pinning it hopes on advertisers looking to tap its member base of 200 million regular users. It is setting its sights on TV, the most lucrative advertising market, and playing up to media companies and major brands its appeal to viewers who use the 140-character messaging platform to discuss what they are watching.
Twitter is estimated to bring in $580 million in advertising revenue this year, and close to $1 billion next year, according to advertising consultancy eMarketer.
On the NFL's part, it plans to use the platform the entire year. The regular season draws 200 million viewers, or roughly 80 percent of all television homes.
(Reporting by Jennifer Saba in New York and Gerry Shih in San Francisco; editing by Andrew Hay)