How does ESPN, the leading cable sports network, maintain its dominance in the broadband world? The network has transcended typical Web offerings with ESPN360, a video content player that plays live sports and is available to visitors at ESPN.com whose Internet service providers have signed up for the programming. John Zaccario, ESPN’s VP of New Media Ad Sales, discusses ESPN360 and other network platforms for broadband video advertising with iSPOT.
iSPOT: Can you discuss the platforms for broadband video advertising that are available at ESPN?
Zaccario: There are two distinct video advertising opportunities. One is ESPNMotion, which is available for everyone throughout ESPN.com and the second is a broadband application we distribute through cable operators and DSL providers called ESPN360. The distribution model for ESPN360 parallels the cable TV distribution model. We come to terms with affiliates and if you’re a subscriber of the affiliate you would have access, much the same way that if your cable operator carries ESPN Classic, you have access to it.
iSPOT: Do ESPN Motion and ESPN360 play different kinds of content?
Zaccario: They do and we differentiate them in this way. ESPN360 is longer form experience, it tries to look more like linear TV. The main point is on ESPN360 you’ll find live games, predominantly college sports. It acts as another shelf for college games. Once we go through ESPN, ESPN2, ESPNU and ESPN Classic we have more games than shelf space. So you’ll see the games on ESPN360. Many of them are exclusive to ESPN360 and don’t run on TV.
iSPOT: How big is the audience on ESPN360?
Zaccario: There is not a very big audience yet, we have seven million subs, mostly through Verizon DSL. There’s another deal we’ll announce shortly that will put us in more than 12 million homes.
iSPOT: Does the advertising on ESPN360 run similar to TV with clusters during breaks in the games?
Zaccario: For live games on ESPN360 the format will be similar to linear TV, so we would run commercial streams. The first time we’ll do this is in March. Up to this point the audience by virtue of the distribution has been small so we haven’t put a big effort into advertising since it hasn’t scaled yet and because we have a fairly significant video business on ESPN.com. The first time we’ll begin inserting commercials will be this March for college basketball championship week. We’re going slowly on purpose to try and generate a secondary revenue stream. Ninety-nine percent of the broadband advertising we’ve done has been with the free audience on ESPN.com and what’s currently called Motion.
iSPOT: What type of ads are you running?
Zaccario: The model on ESPN.com are pre-rolls ads, 15s and 30s, we prefer 15s. The biggest issue surrounding broadband advertising is that pre-rolls and recycled pre-rolls are not the optimal way to execute advertising. The solution has to come from the creative community. The media people and the creative people have to work together to come up with a solution that is shorter form and more relevant for the broadband audience so we don’t have recycled 15s or 30s.
iSPOT: Has ESPN done anything along those lines?
Zaccario: We have done a little, but we’re not in the business of creative advertising. We have created some cobranded creative executions that run as pre-rolls.
iSPOT: Can you give us an example?
Zaccario: For Wendy’s there’s a campaign on the site and on air called Voice of the Fan. It’s an avatar execution on line where fans can go to the application and design a customized way they appear. Whether they have a beard or how they wear their hair or a particular item like a team jersey. Then they can type in some text and create a voice for the character they’ve created. They use the text to create messaging about their preferences in sports, who they like, who they don’t like. So we’ve given fans a voice. The campaign ran this spring.
iSPOT: Will ESPN be doing anything new with broadband video advertising?
Zaccario: We’ll continue to produce pre-rolls because it’s what the marketplace currently demands. Now we have autostart video on the home page to try to aggregate the largest audience possible, which is the difference between us and the other publishers. When you come to ESPN.com you get a video started on the home page, one time per user per day. We’re trying to wrap our arms around the best way to get users to initiate their own video starts with more frequency. The autostart helps us aggregate the audience, but it may not be sustainable so we want to try and condition our audience to start their own videos. We’ve done a few things, the first being to launch a new video player in June that organizes all the video available on ESPN.com and ESPN360. The player was organized in a way that makes it easier for fans to find their videos and initiate the experience. We also launched a community effort with My ESPN, which serves videos relevant to preferences users lay out on the My ESPN page. By doing that they’re limiting and targeting the videos that are served to make them relevant to their interests.
iSPOT: When you target content, do you target ads?
Zaccario: We haven’t done targeted video ads yet. We haven’t done a lot of targeting period. It’s another thing we have to wrap our arms around in 2007. Most of the business we’ve done to date has been on the sponsorship model and that’s worked well for us. The way we’re organized is to go to the marketplace in a multimedia fashion and extend the sponsorships we do on TV online and to a degree in the magazine. The sponsorship model has gotten us here and targeting is the next phase of our evolution.
iSPOT: Are your broadband advertisers TV advertisers or do you find new ones?
Zaccario: Ninety percent of the companies that run video ads are running TV ads. Most of them are repurposed. It’s difficult for a company like GM to decide they want to invest in creating 10 second spots across 20 name plate brands when videos on the Internet haven’t scaled to a degree that will pay off for them. It’s the chicken in the egg scenario. We want the creative community to make the spots, but it will cost the same to make 10s as it costs to make 15s or 30s they can use on TV and if they can use them on TV they’ll get more bang for the buck. It’s a critical issue and I’m not sure how it gets solved.
iSPOT: Who’s the audience that’s seeing your broadband ads?
Zaccario: A homogenous group of men 18-34 or 49, 20 percent women. But if you’re buying our advertising, you’re not buying it reach women, that’s for sure.
iSPOT: What kind of metrics does ESPN use for its broadband video ads?
Zaccario: Ad starts are how we get credited. Sometimes users can control whether they watch the ads but in our case you have to watch ads in order to view the content. Since we autostart videos, they can choose not to watch the entire commercial and can click it off, but we’re getting credit from the advertiser for starting it rather than completing it. The reason for this is it’s our responsibility as the publisher to serve up the message for the ad to be conveyed, but we can’t take responsibility for the creative. So if they click off after 10 seconds, we still get credit for the start. But we have to condition people to think it’s worth sticking around. If they’re an avid sports fan, we want them to think the clips are compelling enough so that they’ll be willing to sit through a short ad to see the video.
