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HOME • MANAGE SUBSCRIPTIONS • MEDIA KIT
ESPN's Erhardt: Men Changing, Advertisers Reacting
by David Goetzl, Monday, March 2, 2009, 7:49 AM

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For years, advertisers that targeted women believed they played a "head of household" role and made the majority of purchasing decisions for the family. But ESPN's Ed Erhardt says that cause-and-effect relationship is changing.

Men are becoming more involved in making household spending choices--perhaps because of the economy--and that could increasingly open doors for ESPN with its male audience.

"Most of the research now shows it is a dual decision," says Erhardt, president of ESPN/ABC Sports customer sales and marketing. "A guy is very much involved in that, so I think there's a change in the male consumer--there's a change in the economy and we like our position based upon that going forward."

In ESPN's case, Erhardt says large packaged goods companies (Kraft and Johnson & Johnson, for example) along with travel advertisers and other traditional female-oriented marketers are shifting dollars in an attempt to reach men.

As a result, he says that's serving as a buffer as some marketers in the financial, retail and automotive categories trim spending in reaction to the economy. A top media buyer, GroupM's chief investment officer Rino Scanzoni, said last week to investors that ESPN is challenged--since 40% of its ad dollars come from those three sectors.

Erhardt says ESPN has "a positive and fruitful relationship" with GroupM, but referred to the 40% figure as "grossly overstated." The percentage of business from those categories is "significantly lower than that," he said, although he declined to provide any details.

Scanzoni did say those categories are broad, and within them, there are still areas of strength. Within the financial sector, for example, insurers such as Geico continue to be heavy spenders, and some banks that are now merging such as Wells Fargo and Wachovia are likely to launch branding campaigns.

Erhardt said the insurance category continues to grow at ESPN. Spending by quick-service restaurants (QSRs), which could be placed under the retail umbrella and have not been hurt as much by the economy, also remains solid.

Erhardt said that while spending by American automakers has been plunging--a problem for all media--ESPN is taking its share of dollars from the likes of Toyota, Nissan and Hyundai. In at least two cases, long-term deals signed before the recession are a help--Toyota with a "Monday Night Football" sponsorship, and Nissan's link with the Heisman Trophy and college football.

Still, even as ESPN may be finding bright spots within struggling categories and attracting some traditionally female-targeted dollars, its ad revenues have taken some lumps recently (in line with many other cable networks).

On a Feb. 3 call with investors, Tom Staggs, the CFO of parent Walt Disney, said sales at ESPN fell by high-single digit percentages in the October-December quarter, partly due to "softness in several categories, including consumer electronics and automotive." Staggs also said sales in the current January-March quarter are below the same period a year ago.

Erhardt declined to comment on whether that trend has continued over the past month, and how the performance in the current quarter will end up.

In addition to the economic climate, another headwind is that prime-time ratings in the 18-to-49 demo are flat this season by one measure, although performance varies by sport.

Coming back to the financial category, Erhardt said ESPN is not likely to suffer as much as some other broadcasters because it has very little golf coverage this year. Many financial advertisers, including investment firms, traditionally have used the sport as a venue to target upscale males. (ESPN/ABC will offer the first two rounds of the U.S. Open and the final two of the British Open.)

"We are not impacted by the financials the way that one might assume," Erhardt says.

ESPN does carry parts of all four tennis Grand Slams, which may attract an upscale audience, but Erhardt says those events are less susceptible to the financial category's difficulties.

Separately, Erhardt indicated that with advertisers demanding more accountability, ESPN offers high viewer engagement across multiple screens, providing "a differentiator in today's marketplace."

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