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Becoming the Place for Sports

Sep 6, 2004  •  Post A Comment

The premise behind ESPN is exceedingly simple-reach young men through abundant sports coverage. That’s something the network has done from 1979, when anchors wore big, bold ESPN patches on their jackets, through today, as they deliver the news with a quip from the high-technology and mostly high-definition Digital Center in Bristol, Conn.

For its 25 years of existence, the network has had little problem signing up advertisers to its cause. Beginning with Budweiser, which sponsored ESPN’s first televised sporting event in 1979, companies have flocked to the cable address where young men can be found around the clock. Many say the ESPN brand is in a class by itself.

“They have certainly changed the way people watch televised sports,” said Peter Butchen, senior VP, national television, at Initiative Media.

That critical relationship with advertisers has matured over time as the network has broadened its scope and added more diverse programming, which has in turn lured a more varied ad base. One of the most important changes took effect five years ago.

Ed Erhardt, president of ESPN/ ABC Sports customer marketing and sales, joined the company in 1999 in that position and bought to the job a forward-thinking focus on integrated media. He began preaching the gospel of linking the buying of ESPN and its networks with ABC Sports, ESPN the Magazine (1.75 million circulation, up from 350,000 at launch in 1998), ESPN Radio and ESPN.com, which so far this year is averaging nearly 16 million unique visitors each month.

Cross-platform buying is critical today, given the changing landscape of TV advertising, said Julie Roehm, director of marketing communications for ESPN advertisers The Chrysler Group, Dodge and Jeep. “[Advertisers] understand that world is shrinking and the only way to survive is to connect the TV message into other formats,” she said.

Miller Brewing Co. is one of ESPN’s top advertisers, spending close to $40 million a year, said Steve Buerger, the company’s group director of marketing services. That number has grown in the past few years as ESPN has begun offering more integrated deals, he said.

In 1999 ESPN completed five multiplatform deals. It will finish this year with about 100. A multiplatform deal includes at least two media and must be more than $1 million, Mr. Erhardt said. Last year more than 40 percent of the deals valued at $1 million or more included at least one media property other than TV.

ESPN’s ad revenues (for the network alone) rose from $1.02 billion in 1999 to $1.16 billion in 2003, an increase of 14.4 percent, according to figures provided by TNS Media Intelligence/CMR. That includes a dip in 2001 to $1 billion and another dip to $920 million in 2002.

Media buyers credit ESPN with being one of the pioneers of the notion of cross-platform buying. More important, though, is that ESPN is the one place where an advertiser can buy the same brand across a multitude of media, said Dan Donnelly, senior VP and group director at MediaVest. “Because it’s their brand and they have full ownership of it in different mediums, I would say they are better at it than anybody else,” he said.

Cingular Wireless disseminates its message across ESPN’s multiple platforms. The integrated approach allows the cellular carrier to reach its target demographic in more ways than one. It also allows Cingular to communicate different messages, using TV spots to lay out its latest rate service plan, for instance, and print or radio to present ways to download ring tones of various teams’ fight songs, said Vance Overbey, executive director of advertising and sponsorships for Cingular.

Many multiplatform deals have been much larger than the $1 million threshold. ESPN has inked integrated deals with Anheuser-Busch, one of its leading advertisers, in excess of $70 million per year. That includes a presence on ABC’s “Monday Night Football” as well as college basketball, hockey, ESPN the Magazine and even Bud Light’s sponsorship of the “National Quarter Bouncers Championship,” based on a bar game.

A $70 million deal is on the high end. “That’s a major marketer utilizing a majorly recognized brand to the full extent,” said Mr. Donnelly, who worked at Anheuser-Busch for eight years before joining MediaVest.

Before integrated deals became commonplace, ESPN expanded its audience beyond its core male viewer when it made college football coverage a staple of the network in the early 1980s. “I think that was the beginning of sampling us from a broad span beyond men,” Mr. Erhardt said. The demographic base is still clearly male, he said, “but there are a lot of sports fans that are also female.”

The network then acquired part of the Sunday night NFL football package in 1987. “That was a really important landmark in how advertisers perceived ESPN,” Mr. Erhardt said. “I think the NFL is premium programming, and [nearly] every important advertiser interested in reaching a male or adult marketplace sees the NFL as something they have to be a part of. So you went from being an important part of a media buy to a must-have,” he said.

Looking into the future, cross-platform deals should only continue to flourish as content providers and consumers embrace the convergence of media consumption across multiple devices. “We’re a big believer in a four-screen world-TV, HD, computer and palm [handheld device],” Mr. Erhardt said. “Our brand travels so well in each of those screens.”

“To the degree that more and more advertisers are thinking about certain content that travels digitally … messages can travel very efficiently to those devices. I think we try to lay out for each one of our customers what we are doing in those areas as it relates to those four screens and try to tailor programs that really take advantage of that,” he said.

ESPN also customizes advertising for its sponsors. For instance, the network created ESPN Shorts, a series of short films that launched as part of “SportsCenter” in April with Sears, Roebuck and Co. and Miller Brewing Co. as the presenting sponsors. Under the deal, each of the sponsors aired a series of 90-second films that told a sports-themed story over the span of a month. The next set should air later this year.

ESPN also has another built-in advantage that few others have heading into the time-shifting world. Sports programming, along with news, is least likely to be impacted by TiVo and other digital video recorders, Initiative’s Mr. Butchen said.

“The key thing for advertisers now is to do more than just running :30s and integrate yourself into the fabric of the programming, and sports just lends itself to that,” he said. “You can title halftime shows and have vignettes and sponsorships, which you can’t miss. It’s impossible to TiVo it out.”

A Beta Research Corp. study in January found that ESPN was ranked first among ad-supported networks by advertising executives in brand image and providing a desirable programming environment in which to advertise.

Sports programming is the surest means to reach men with an advertising message. “Sports is the perfect place to find the male demo,” said Annette Cerbone, senior VP of director national broadcast, Universal McCann.