Wide-Ranging Deals Help ESPN Score With Marketers

GMC, Lexus and Others Praise Cable Network's Ability to Integrate Advertisers Across TV, Print, Internet and Mobile Options

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NEW YORK (AdAge.com) -- When ESPN scored an average 9.9 rating for its first season of "Monday Night Football," it certainly gave its sales team plenty to crow about. The NFL telecasts drew ESPN's-and cable TV's-largest ratings ever among TV series.

Ed Erhardt, president of ESPN's customer-marketing and sales division, is quick to credit the program's multiplatform deals, such as the one it brokered with General Motors Corp.'s GMC unit which prompted more than 1.5 million people to enter a competition called "GMC Keys to Victory" during "Monday Night Football."

That's one of the largest draws for a contest on the network, he says, and it was a major component of a larger, multiplatform deal between GM and ESPN that stretched across TV, print and online media. In addition to a large schedule of traditional commercials on ESPN, the promotion included integration of GMC branding and vehicles within the "Monday Night Football" opening sequence. There was a "Keys to the Game" feature on the "Monday Night Countdown" show and the episodes of "SportsCenter" that ran just after "MNF" games. GMC ran a seasonlong promotion of the competition on ESPN.com, and the vehicle brand also ran a large gatefold insert in ESPN the Magazine, which included a schedule of the "MNF" games.

GMC Marketing Director Steve Rosenblum says the ESPN deal "hit a broad spectrum of media" that reached the youthful male target of General Motors' all-truck brand. "To put the cachet of two strong trademarks together makes sense," he says. As part of the deal, GMC gave away a Sierra pickup weekly for 16 weeks on keystovictory.com, linked on both GMC.com and ESPN.com.

"The coolest part," Mr. Erhardt says, was GMC's use of "MNF's" theme music in its commercials that ran during the games. "It brought it full circle," he says.

Multiplatform results are increasingly becoming more important to ESPN as it seeks to maintain its title as the cable network with the most ad revenue. Advertisers and agencies dole out heaps of praise-along with a sprinkling of encouragement to do better-when discussing the multiplatform opportunities the brand is offering.

That is sure to come up during the next round of upfront discussions. ESPN last year lined up a major Toyota Motor Sales USA package that involved sponsorship of the "MNF" halftime shows by its Toyota and Lexus brands. The deal also reached out to audiences of ESPN Radio, ESPN.com and ESPN's "SportsCenter."

That was followed last August by ESPN's announcement that Home Depot had extended its sponsorship of the "College GameDay" series, which focuses on football. Home Depot's branding is apparent in the title, "ESPN College GameDay Built by the Home Depot"; on the main desk of the set; and in a flight of commercial spots and special features that extend beyond TV to ESPN.com, ESPN Radio, ESPN Wireless, ESPN podcasts and ESPN the Magazine.

We "are planning to be involved again this year," says Deborah Wahl Meyer, VP-marketing of Toyota's Lexus Division. "Lexus sponsored the halftime show, including advertising exclusives, on-set logos and in-program drivers to online content. We also partnered with ESPN for home-page sponsorship on game day, mobile content, bus wraps, athlete appearances, ['MNF'] radio previews and podcasts. It is a good example of a multiplatform approach using creative places and spaces."

ESPN officials don't specify how much of their revenue is derived from multimedia deals, but the importance of expanding new revenue streams with multiplatform deals is also clear. The TV networks are clearly the muscle behind the brand, with last year's ad revenue calculated at more than $1.8 billion by TNS Media Intelligence (see chart on S-6). Its burgeoning online-ad business grew 81% in 2006 vs. 2005 (to $174 million).

Given the nascent nature of the business, it's not surprising that growth percentages for multiplatform deals are much higher. Revenue for the non-TV business written during the upfront in 2006, largely tied to multiplatform deals, was up 50% in 2006 vs. 2005, according to ESPN.

"We have significantly increased our non-television business that we write during the upfront," Mr. Erhardt says, adding that multiplatform deals will be pitched to "every major agency we're doing an upfront deal with. We'll have three or four multimedia ideas that we've presold, and those dollars will move during the upfront."

Ad executives contacted for this story say ESPN's multimedia opportunities compare very favorably to what most other networks are offering. Part of that has to do with how the sales teams offer expertise in all available media. "I applaud them for bringing the web ... and now mobile into the center of the organization," says Eric Bader, senior VP-managing director of MediaVest Digital Connections, part of Publicis Groupe.

But he and others note the attractiveness of the young male demographic. It starts with those youthful viewers whom sports programming attracts and advertisers crave. But beyond that, "sports fans are a very distinct group in the way they identify themselves, as opposed to broader audiences at Yahoo or MSN or AOL," Mr. Bader says.

Indeed, Mr. Erhardt notes that ESPN's multiplatform strategy "starts with the brand ESPN and the relationship it has with sports fans." But he also says that another major factor is the way the brand's sales teams are organized, a structure he put in place about 18 months ago.

He explains that the expertise of each team's leader cuts across all of ESPN's brand extensions, but the team members who work under a leader specialize in one particular medium. That way they can work collectively to come up with solutions, rather than operating in separate silos. That cuts down on the number of sales calls to a given client and sharpens the teams' knowledge of advertiser needs.

Chris Riehn, a senior media manager at Cingular Wireless, which is in the process of rebranding itself "the new AT&T," notes another plus: "They really know how to execute [multiplatform advertising campaigns] the right way," he says.

Still, some media-agency executives see room for ESPN, and the industry in general, to improve its approach to multimedia deals.

Among them is Mitch Oscar, exec VP at Carat Digital. "When it's a major sponsorship and a five-year commitment, sure they come up with something [creative]," he says of ESPN and, by extension, other TV networks. However, "they don't come up with exciting solutions" for medium-size and smaller-size companies.

Mr. Oscar notes that often creative ideas ESPN and other cable networks devise are unrelated to the campaigns clients are running on TV. He uses the term "cookie cutter" to describe the solutions offered a few years ago when he was seeking a multiplatform deal for Papa John's International.

Mr. Bader says ESPN's ad model could be more innovative, particularly with online. He notes that ESPN Motion, the video element on ESPN.com's home page, allows only for linear ads; he'd like the video ads to be interactive. "We have the opportunity to buy space on the same page as the [video] ad. And those ads can be interactive. ... But we're not satisfied with that model."

contributing: jean halliday
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