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
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Why This Matters: As ratings sag for entertainment programming, big audiences watching sports are increasingly attractive to advertisers.
