Apple's Soccer TV Push: Advertisers Not Guaranteed Results

Apple Inc. will launch its new streaming service for Major League Soccer this week with a new approach to TV advertising. Traditional practices will be replaced with a more modern approach that focuses on digital and social media.

Cupertino-based technology company, Apple, is not looking for buyers of individual ads during the games, but is asking marketers to buy a season-long series of spots that will run during the games, according to people familiar with the company’s sales efforts.

Apple is not guaranteeing advertisers that they will reach a certain number of viewers, a standard practice in TV. It is also not accepting ads from sports-betting companies, at least initially, according to two of the people.

Apple's MLS Season Pass, debuting on February 1st, marks the company's first major push into the $68 billion US TV ad market. Through a 10-year deal reached last year, Apple will stream the men's professional soccer league, which aired previously on ESPN, Fox, and Univision. The deal is worth at least $250 million annually. Fans can buy the MLS Season Pass for $15 a month, or $99 per season, through the Apple TV app.

Apple is increasingly interested in sports. Last year, the company streamed Major League Baseball games on Friday nights, but MLB sold the ads for those games. For MLS, however, Apple has assembled its own sales team, led by Todd Teresi, the company’s vice president of advertising platforms. The team has been meeting with potential sponsors and advertisers in recent weeks.

Apple did not respond to requests for comment. Fox Corporation is also airing some Major League Soccer games this year.

While MLS has not been a particularly big draw on television, its regular season audience on ABC and ESPN averaged 343,000 viewers per game last year. However, live sports, especially soccer, have been attracting new subscribers to streaming services.

Apple is selling three MLS sponsorship packages, with the most expensive one costing around $4 million per season. This package includes the playoffs and integrations like sponsoring a "Player of the Match." The less expensive packages, called "Silver" and "Bronze," cost around $3 million and $1.5 million per season, respectively.

The company has informed media buyers that it would allow ads from categories such as credit cards, alcohol and car rentals, one person said. It is not unusual for a tech giant to be selective about who can advertise on its platform. Amazon.com Inc., for example, wasn't accepting commercials from beer companies during Thursday Night Football this past season.

Amazon has hired Nielsen, the measurement firm that has calculated TV audiences for decades, to count the viewers watching NFL games on Prime Video. This move is aimed at making advertisers comfortable with the platform.

Apple's role in the advertising industry has been controversial. Its privacy changes two years ago hurt social-media companies like Facebook's owner, Meta Platforms Inc., by making it harder to target iPhone users. Apple has said its own foray into selling ads is unrelated to those changes. However, some experts believe that the company's move into the advertising market is a direct response to the privacy changes, and that Apple is using its position to gain an advantage over its competitors.

Apple is looking to increase its advertising revenue to $10 billion or more annually, Bloomberg News has reported. This includes putting search advertisements in more apps, such as its maps service, as early as this year.

Dave Morgan, chief executive officer of Simulmedia, believes that Apple has the potential to become an even bigger ad giant in the future. This is due to the fact that the company has a global reach, with hundreds of millions of people owning Apple devices. Simulmedia helps marketers place ads more precisely, and could potentially benefit from a larger role for Apple in the advertising world.

"It has an absolutely extraordinary distribution," he said.

According to Morgan, Apple will need to grow its subscriber base, prove it can build effective ad technology, and acquire more live sports rights. The company was in talks last year to stream NFL Sunday Ticket, which would give viewers access to games not airing in their local TV markets. However, Alphabet Inc., owner of YouTube, won those rights.

"MLS alone won't be enough," Morgan said. "They'll need to follow up with other things."