ESPN Keeping Eye on the Ball, Not the Game Behind It
Ad sales chief Erhardt on why he's not worried about emerging competitors
By John Consoli -- Broadcasting & Cable, 3/6/2013 2:15:57 PM
But ESPN execs are not too worried; network ad revenue dwarfs its current competitors, and media buyers believe it will take some time for Fox Sports 1 to pull any type of significant ad dollars away.
The Disney-owned "Worldwide Leader in Sports" has its own story to tell to marketers. It was ranked first in "perceived value" in Beta Research Corp.'s annual Cable Operator Evaluation Study for the 13th straight year, with 95% of cable operators describing ESPN as "very important" for subscriber retention and acquisition. And, according to comScore, ESPN Digital Media accounted for 29% of all sports category usage across digital platforms in January.
If ESPN execs are sweating over their newest competitor, it's not evident when talking to Ed Erhardt, president of ESPN global customer marketing and sales, who recently spoke about the company's newest rival, and how ESPN ad sales are performing in first quarter. An edited transcript follows.
How do you see the Fox Sports 1 start-up and the increased competition from NBC Sports Network and CBS Sports Network impacting ESPN ad sales?
We sell who we are and will continue to do so. We have a brand that's long established, a multimedia brand with sizable audience of both men and women. While Fox or the others focus on how they will position themselves to sell against us with their sports networks, we consider our sales competition to be much broader than those all-sports networks. We include the broadcast networks in primetime, Facebook, Google and Sports Illustrated as competitors too. There are a wide variety of players who want to go after the large piece of overall media pie that sports advertising is. We are not an emerging brand like some of these competitors are. We are not focusing on them. We are keeping our eye on the direction we are going in. We are selling commercials for our programming across all screens because viewers are watching sports on all screens. That's our ad focus.
Where do you stand on NBA sales for regular season and the playoffs? Have lower ratings this season compared to last season had any impact on ad sales?
Advertiser demand for NBA inventory is strong and sales have been very active. A lot of the larger market teams are playing well and that helps viewer interest and ad sales. In April, May and June the NBA playoffs is the highest rated sports programming on television. Last year was an extraordinary year for NBA telecasts. The labor stoppage created a pent-up demand among fans and ratings reflected that with much more viewership once the delayed season started. After the strong year last season, some ratings decline was inevitable. But we are seeing signs of strong advertiser demand for the playoffs, particularly in the movie studio category. We offer four exclusive windows for studios in the playoffs, which are packages that include commercials, integrations and other opportunities. All four of those windows in the movie category are sold out through the playoffs and NBA finals on ABC.
The Major League Baseball regular season has not started yet, but where do you stand on MLB ad sales?
Our MLB regular season inventory is extremely well sold. We've had MLB on ESPN for a very long time so there are a number of advertisers who are in every year. We also sold a lot of MLB inventory in last year's upfront for this season. In addition, the MLB organization also does a good job of getting their official partners to advertise with us and the scatter market right now for sports is active. Actually, we really don't have too much MLB inventory left to sell.
You lost State Farm as the official sponsor of the MLB All-Star Game Home Run Derby, which you televise. Have you signed on a replacement yet?
We are still talking with MLB about who the new sponsor will be and aren't ready to make any announcement yet.
How do you see the sports market playing out in the upfront this year?
Sports will again fare very well in the upfront. As DVR viewing of TV programming approaches 50%, there will be a continued demand by advertisers for live sports programming. And as the ad industry gets more comfortable buying across multiple screens and platforms it will bode well for ESPN. Most of the deals we are doing now with advertisers include buys across all screens where we show our programming, including live telecasts.
ESPN Friday Night Fights returned in January for its 15th season. How are ad sales for those telecasts?
These telecasts have been a nice little gem for us in terms of advertising. Corona is the presenting sponsor for the telecasts on both ESPN2 and ESPN Deportes. A few years ago, boxing was a hard sell, but it has become a good programming showcase for us on Friday nights and advertisers have come back. We have televised some good matches with undefeated boxers in different weight classes. More advertisers are open to advertising on boxing telecasts and are recognizing the value of reaching out to multicultural audiences who watch these telecasts.
SportsCenter telecasts can be found almost around the clock on ESPN today. How is advertiser demand?
The addition of the midnight SportsCenter turned out to be a good new window of revenue for us. Advertisers like SportsCenter and for many advertisers it has become a core part of their overall buy. Our morning show First Take on ESPN2, which we revamped last summer has also been selling well.
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