Valued at north of $1 million for a year-plus sponsorship, the deal isn't going to blow the lid off the upfront market-and calling it an "upfront deal" is Comcast's categorization, not Gatorade's. But it's a signal that alternatives to linear TV are gaining traction as legitimate pieces of a marketing plan.
"We've been having discussions with a lot of advertisers over the past few months and the upfront presentation helped crystallize the opportunity in on demand," said Matt Strauss, VP-content acquisitions for Comcast. Gatorade's Propel Fitness Water brand will sponsor the channel's more casual workout programs and the Gatorade brand will sponsor hardcore sports-training programs.
The deal includes original content created by Gatorade as well as traditional spots at the beginning and end of the content and in-program branded billboards. ExerciseTV launched last fall with New Balance as its inaugural advertiser and is available in 15 million Comcast and Time Warner Cable homes.
Cable video on demand is still nascent when compared to online video consumption and broadband penetration. By the end of 2005, on-demand service was available in about 21% of U.S. TV households and brought in about $50 million in ad revenue, according to Magna Global estimates. But Comcast is rolling out the service aggressively-it's available in nearly all of Comcast's 10 million digital-cable homes, and last year Comcast streamed 1.5 billion on-demand programs. "For those who have it, it's way past the novelty phase and integral to how you watch TV-like a DVR," Mr. Strauss said.
Much of the Gatorade deal was orchestrated by ExerciseTV founder Jake Steinfeld, of "Body by Jake" fame, who counts major media buyers OMD CEO Joe Uva and Magna Global Chair Bill Cella as friends. (Mr. Uva used to sell Mr. Steinfeld's "fitness breaks" on CNN in the mid '80s.) Mr. Steinfeld is a VOD convert-especially when it allows advertisers to create content that fits their objectives.
He likens the current wave of dissatisfaction with linear TV to the reason people often quit on exercise-"because you have to fit your lifestyle into someone else's program. It should be the other way around."
Short-form original vignettes could take the form of a scientist from the Gatorade Sports Science Institute speaking on the importance of hydration or protein supplements. Or, Gatorade could offer up sponsored tips-"remember to breathe," "hold your head straight"-while an on-air personality coaches a viewer through crunches. Eventually, the deal could also make the channel a place where Gatorade's other sports-related content, such as extra commercial footage of its athlete endorsers, lives.
"The 30-second spot is just one possible edit of all the film you're creating," said Tom Fox, senior VP-global sports marketing for Gatorade. "The question is how do we take a lot of the ancillary content around that and play more broadly?"
Bob Porcaro, client-communications director at OMD, Chicago, which handles the Gatorade TV account, said the client didn't go out seeking a VOD deal this year. TV, he said, works "exceptionally hard" for Gatorade and his client hasn't made the major cuts to its traditional TV budget that other marketers have made headlines for doing. Yet, he said, "we're all in agreement that just because TV is working we need to keep on top of this other stuff because someday TV might not work."