SBJ/May 7 - 13, 2007/SBJ In Depth

Is success for ESPN in the cards?

hen ESPN delivers its upfront sales presentation to national advertisers next week, it will revolve around a character called “Freeze,” who almost certainly will never be seen anywhere on ESPN’s on-air schedule.

ESPN executives will have a slate of new programming
to unveil at the upfront presentation, but they still plan
to focus a lot of time on established shows like
“Monday Night Football.”

Created specifically for the sales event, which is planned for May 15 at the Nokia Theater on Broadway, the character underscores the importance ESPN is placing on the event, which it is billing as “ESPN on Broadway.”

This marks the first time that the company has ever given an upfront sales presentation the same week as broadcast networks. ESPN obtained a slot that was vacated last year when the WB and UPN merged. ESPN has had similar presentations for the past five years, but none were scheduled during the broadcasters’ upfront week.

Wanting to save surprises and sizzle for the event, ESPN executives have been tight-lipped about how they plan to pitch advertisers at the event.

Still, ESPN executives shared some aspects of what they are planning, including “Freeze,” who ESPN’s ad sales force will use to illustrate the company’s upfront multiplatform message to advertisers.

“We will create something that this guy Freeze does that’s a superhuman event,” said Bruce Jackson, ESPN’s vice president of marketing services for customer marketing and sales. “It catches like wildfire across the ESPN platform, so we’ll be able to show how news moves across ESPN and how we can make something into a cultural event through our range of multimedia properties that our fans engage with.”

ESPN will continue to tell Freeze’s story throughout the 60-minute program, which will include a theatrical opening, several sports celebrities and details about new shows that ESPN executives are keeping secret for now.

“There’s more to Freeze’s story that we’re not going to get into right now,” Jackson said.

ESPN is comfortable making its upfront presentation heavy on theatrics since most of the ad buyers already are familiar with ESPN’s message. ESPN is viewing its upfront presentation as the culmination of a three-month sales process throughout which ESPN’s ad sales team has been delivering its pitch.

“We’ll have had our presentation out there virtually to every client and every agency for about 90 days,” Jackson said.

As expected, much of ESPN’s sales presentation deals with the multiplatform strategy that it popularized during “Monday Night Football” last year. The approach of selling across all of ESPN’s platforms — television, online, broadband, print and mobile — resonated with advertisers last year. The network virtually sold out its NFL inventory before the season even started last year.

This year, ad buyers say they will be more thoughtful about how they use the multiplatform approach, not wanting to limit such deals to one company. Multiplatform buys have developed to the point where ad buyers will be looking to buy TV spots with one network, broadband spots with another and radio or print spots with another.

ESPN’s pitch, however, is about more than just multiple platforms. Company executives also are highlighting the makeup of its viewers — a diverse and passionate group, according to the company — as a key selling point this spring. It’s also a message that resonates with ad buyers.

A character named “Freeze” will help show
how news moves along ESPN’s platforms.

“Sports fans consume ESPN,” said Tom McGovern, Optimum Sports director of sports media. “It is on the air with sports when no one else is.”

To that end, ESPN is giving its ad clients decks of “fan cards” that are modeled after baseball cards, but with pictures and stats about actual ESPN viewers. The point is that sports fans hit every group, from young to old, and every ethnic group.

“The cards are designed to get people to think about sports as more than just the 28-year-old guy,” said Ed Erhardt, president of ESPN’s customer marketing and sales. “From an advertising and marketing point of view, it allows us to attract dollars from different categories in a much more coordinated way.”

For example, one card features “Amy,” a marketing manager from Dallas who is 30 years old and single. A quote from her on the card says she enjoys ESPN because “It’s as passionate about sports as I am.” The back of the card lists sports programming offered on ESPN, ESPN2 and ABC. The back of other cards describe everything from ESPN’s global reach to offers for metrics to show the company’s return for advertisers.

As always, another point of emphasis for ESPN is its brand, which exists across ABC, ESPN and ESPN2. Using the tag line “It’s all ESPN,” ESPN executives are selling advertisers on the fact that games and talent on all three networks will be the same.

“Every deal that we do now with a major league includes a component of all three of those networks generally being part of the distribution,” Erhardt said. “That’s a different way than most people want to go out there. They want to say that it’s cable, or it’s broadcast. To us, it’s just ESPN.”

This could be a tough sell to advertisers, who are more interested in audience delivery. Many were quick to note that ESPN2 delivers fewer viewers than ESPN, which in turn delivers fewer viewers than ABC. They point to “Monday Night Football’s” ratings drop from ABC to ESPN as evidence that the three channels aren’t equal.

ESPN executives say they will have a slate of new programming to unveil at the upfront presentation — announcements that they are keeping secret until then. Still, they plan to focus a lot of time on established shows, such as “SportsCenter,” “Monday Night Football” and game coverage.

“There aren’t many networks that have as many shows that are returning as we do,” Erhardt said. “We’re not trying to reinvent the wheel with 75 percent of our schedule, which is what the rest of television has to do. That’s something I always want to remind our customers.”

ESPN will be gauging interest in the exclusive “SportsCenter” episodes, where the entire hour is sold to one advertiser. Last year, ESPN sold those spots to Nike and Xbox and would like to sell that more frequently this year.

Setting sales goals

It’s clear that ESPN is part of ad buyers’ plans, thanks mainly to its strong, young demographics and the strength of its brand.

“They’re a core part of our overall strategy, but they are part of a bigger plan,” McGovern said. “And Fox, CBS and NBC are part of that same plan.”

Some ad buyers also are applauding ESPN’s decision to move its presentation next week, during the broadcast network upfront.

“It’s a smart and bold move,” said Sam Sussman, vice president and media director at Starcom Worldwide. “This allows them to connect with a broader group of agencies that will be in town for the upfronts.”

ESPN executives insist that they are not feeling pressure with this year’s upfront, despite increased attention that comes with launching an event during the week normally associated with broadcast networks.

Much of that reason is because the May upfront is one of several selling seasons ESPN encounters throughout the year. It starts during the traditional upfront and continues in the prime-time marketplace, which takes place during the summer’s first six weeks. The cable market follows, which is then followed by the sports football marketplace, Erhardt said.

“What’s unique to us, every year for us the upfront lasts for the entire summer. It always has and it always will,” he said. “We don’t spend a lot of time worrying about whether the market is going to happen in two weeks or three months. It always happens in three months for us.”

Erhardt said ESPN expects to conduct 50 percent of its business during the May upfronts, compared with a traditional broadcaster’s 80 percent. Already, ESPN is seeing multiple integrated multimedia deals with various agencies.

“The money will move in the upfront because that’s when the money moves,” Erhardt said. “But we’ll have those built in as part of our broad-based upfronts.”


We’ll be right back after these messages

Five of the 11 cable networks with the fewest commercials are sports stations. Listed here are the top 10 stations that air the fewest paid-programming minutes, as well as other networks with significant sports broadcasts.

Includes in-house promotional ads and public service announcements
Rank
Network
Non-program minutes per hour (minutes: seconds)*
1 Lifetime Movie Classics
10:21
2 AMC
11:58
3 ESPN2
12:01
4 ESPN
12:31
5 ESPN Classic
13:01
6 Golf Channel
13:09
7 ESPNews
13:24
8 National Geographic
13:45
9 Toon Disney
14:10
10 BBC-America
14:23
11 Turner Network Television
14:25
17 Speed
14:51

Does not include in-house promotional ads and public service announcements
Rank
Network
Non-program minutes per hour (minutes: seconds)*
1 Lifetime Movie Classics
08:14
2 Toon Disney
09:37
3 AMC
09:52
4 Discovery Channel
10:42
5 Discovery Times
10:45
6 ESPN2
10:45
7 National Geographic
10:48
8 ESPN Classic
10:49
9 Military Channel
10:49
10 Golf Channel
11:15
12 ESPN
11:25
14 ESPNews
11:40
15 Turner Network Television
11:40
26 Speed
12:55
* Average total per hour, prime time
Source: SportsBusiness Journal analysis of Nielsen Monitor-Plus data


Sources: PricewaterhouseCoopers LLC; Wilkofsky Gruen Associates; Internet Advertising Bureau


Tracking online sports advertising

An estimated $481 million was spent on online sports advertising last year, according to Nielsen/NetRatings’ AdRelevance data, an increase of 9.9 percent over 2005 and 19.7 percent over 2004.
The figures below reflect 2006 CPM-based advertising spending on sports and recreation sites, and excludes search-based advertising, paid fee services, performance-based campaigns, sponsorships, barters, partnership advertising, advertorials, promotions and e-mail. Advertising within AOL’s proprietary service is also excluded.

Spending by company
Rank
Company
Estimated spending
1 Experian Group
$18,310,400
2 General Motors
$17,675,600
3 Vonage
$15,062,700
4 AT&T
$14,994,400
5 Viacom
$13,864,400
6 Travelport Corporate Solutions
$12,876,600
7 Sprint
$7,583,000
8 General Electric
$7,308,200
9 CBS
$6,821,600
10 Toyota
$6,820,300
11 Netflix
$6,267,700
12 Coca-Cola
$6,225,200
13 United Online
$5,845,400
14 Time Warner
$5,715,400
15 Verizon
$5,570,800
16 Monster
$5,148,900
17 NexTag
$5,031,700
18 Vendare Group
$4,962,200
19 StubHub.com
$4,820,500
20 Adidas
$4,636,300
Source: Nielsen/NetRatings



Sports ad spending (billions, 2006)
Network TV $6.50
Cable TV $3.33
Other TV $1.14
National magazines $1.53
Internet $0.48
Radio $0.51
TOTAL $13.49
Source: SportsBusiness Journal
Video game in-game advertising * (millions)
2004 $34
2005 $56.5
2006 $164.7
2007 $345.2
2008 $481.8
2009 $608.0
2010 $732.5
* For computer and video game consoles such as Xbox, PlayStation, etc. Figures for 2007-10 are projections.
Source: Yankee Group

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