Why This Matters: As ratings sag for entertainment programming, big audiences watching sports are increasingly attractive to advertisers.
At last year’s upfront, Fox led off with sports, touting the high ratings it would get in the fall for its Sunday National Football League games, its Saturday college football contests and baseball’s World Series.
This year, with Fox adding NFL Thursday Night Football to the mix, the playbook will remain the same. As ratings for entertainment programs erode, the network is pushing sports as a primetime replacement for advertisers looking to reach mass audiences in a hurry.
Not coincidentally, ESPN is one of the few cable programmers that make an upfront presentation during the week in May when the broadcasters unveil their fall schedules and ply sponsors and media buyers with copious quantities of drinks and shrimp.
“Sports is entertainment,” ESPN senior VP, sales and marketing Patrica Betron said. “The upfront really is about all of the networks sharing their pilots, their stories. And we feel like some of the most compelling stories are in sports, because the outcome is unknown.”
This year, ESPN will also be working more closely with its cohorts at ABC, with both touting the ability to bring their parent company’s “Disney Magic” to sponsors.
Unlike most entertainment networks, ESPN’s primetime ratings rose 7% last year, added Wendell Scott, ESPN’s senior VP, multimedia sales. That’s bringing in advertisers that haven’t advertised in sports in the past, he said.
Media buyers confirm the trend.
“More and more, we are looking at sports to be a version of ‘entertainment,’ ” Horizon Media co-chief investment officer David Campanelli said. “Ratings for sports are still more stable than entertainment. They are also still live. While you might have a higher percentage of the sports audience watching via digital streaming, they are still watching live, which is different than a network entertainment show where digital means delayed viewing, which adds to the challenge of measuring and buying.”
Working the Cost Factor
One issue the buyers need to work around is the high cost of advertising on sports. “Those CPMs tend to be higher, particularly for adult and female demos, so that presents a challenge,” Campanelli noted.
But media buyers have less and less choice if their clients want to reach mass audiences leading into the holiday shopping season.
Fox will claim that it is a must-buy for advertisers looking to reach both weekend shoppers and football fans.
“Adding Thursday night for us has put us in a situation where we can get you coming into the weekend with big ratings and right through the weekend, finishing off with America’s game of the week” on Sunday, Fox executive VP, sports sales Neil Mulcahy said.
“And I think when you put in college football, when you put in World Series, you hope [media buyers] are going to look at this and say these guys should be the first stop, or we want you to be the first stop,” Mulcahy said.
Fox is paying $550 million per year to air 11 Thursday night NFL games over the next five seasons. It outbid CBS and NBC, which split the package last year. NBC and CBS said they lost money on Thursday Night Football.
Last year, ratings were down for the NFL for the second straight year after a long period of growing viewership. Regular season advertising revenues were also down slightly.
There are many possible explanations for the sudden weakness of NFL football, still the most powerful programming on TV. They range from the poor performance of high-profile teams because of the loss of key players and concern over brain injuries to complaints about player protests, which were fanned by President Donald Trump.
But Fox has bet the NFL will continue to deliver large audiences and healthy ad revenue.
“The amount of people who tune in to watch NFL games is down only 3% since 2015,” Mulcahy said. “The problem is the amount of time they’re watching.”
Mulcahy said he’s confident that marquee NFC teams including the Dallas Cowboys, New York Giants and Green Bay Packers will be better this year, and said he sees early signs of enthusiasm for football as free agents have signed, trades have been made and fans gear up for the NFL Draft.
By having the entire 11-game Thursday night package, Fox will be better able to promote the games and ensure viewers tune in. The network will also continue to innovate with ad formats, including strategically placed six-second ads and double-box executions that let viewers keep an eye on the field while a spot plays, in order to heighten engagement.
“It gives us a national opportunity to do something across the whole country where you’re not regionalized,” Mulcahy said. “We’re really looking forward to it. I think we’re really going to make Thursday stand out as a great opportunity for advertisers to do different things which really didn’t exist.”
Channeling the Right Viewers
In addition to being large, Fox’s NFL audience is stocked with attractive consumers who watch live — which makes them more likely to see the commercials when the advertisers want them seen, Mulcahy said. He said Fox Sunday viewers are 78% more likely than the average TV watcher to be from a household with $150,000 or more in income.
According to Nielsen, Fox Sports viewers also spend more on airlines, amusement parks, car rentals, cable services, casual dining, consumer electronics, cruise lines, home improvement retail, hotels, investment services, mass merchandisers, movies theaters, online retail, retail, quick service restaurants, travel services and wireless phones.
Also significantly, a lot of women watch football, and many of them are hard to reach in other programming. “You can buy as much entertainment as you want, but they’re elusive viewers who are fans rooting for their teams,” Mulcahy said. “The only way to get to them is really to buy the NFL.”
Buying NFL games to reach a female demographic can be prohibitively expensive, but Fox’s pregame and postgame shows are also among the top-rated programs with women, and prices for those might be more attractive to advertisers looking for female consumers.
ESPN also sees itself as a vehicle for reaching women. The college football national championship game drew a big dual audience of both genders, for example.
“They are sports fans,” Betron said. “The idea that they’re just sitting next to their boyfriend or husband is a myth. They are engaged sports fans.”
Those fans tend to have higher incomes, and that’s attracting an expanding roster of clients, Scott added. “We’re seeing growth amongst the finance category, the insurance category.” Foreign autos and more upscale products are also strong.
Beyond prime, ESPN also feels it has a compelling story in late night with Scott Van Pelt’s midnight SportsCenter. “When you look at the demos, we are actually much younger than the traditional network late-night shows. We’re also more affluent than the traditional late-night shows. So we think that’s another opportunity for people to reconsider ESPN,” Betron said.
This year, in addition to its annual upfront event, ESPN will also make a presentation during the digital content NewFronts. “We will be talking about how sports programming also powers different parts of the ESPN platform,” said Scott, mentioning the SportsCenter program on Snapchat that was viewed by 2 million people under the age of 30 daily.
ESPN will also be launching a new app and the ESPN Plus over-the-top service. Both will create new opportunities for advertisers. ESPN will also be discussing innovative ways to weave ads into its content. “We’ve been doing it for a long time. If you look back we’ve had complete pod takeovers, we’ve reformatted SportsCenter. We’re using DFX technology,” Betron said. “One of the things you’re going to see this year is ad innovation within our redesigned app and our ESPN Plus experience. So not just on linear, but the best ad experience on mobile platforms.”
With The Walt Disney Co.’s recent corporate reorganization, which put the ad sales, ad technology and operations departments of both Disney/ABC Television and ESPN under Kevin Mayer, the chairman of the new Direct-To-Consumer segment, ESPN and ABC are likely to work together more.
There will be opportunities for ESPN to leverage Disney’s data and technology to bring clients better targeting, Scott said.
ESPN and ABC will be looking at opportunities to cooperate on a client-by-client basis.
“At the upfront, you’ll hear us talking a lot about the ‘Disney Difference’ and certain examples of deals that we’ve done that brings that to life,” Betron said. “When you look across our portfolio we have the best quality content, the best storytelling of any media company; that’s in Disney’s DNA and the ad community is really responding well to that.”