ESPN 360 May Score With Ads

It will only last a short time. But ESPN may find impressive viewer engagement scores for some ads now running on ESPN360.com, a site that streams live sports events. It has run promos for so long, consumers may be finding the ads a welcome change.

The programmer has begun using newly developed dynamic ad insertion technology to weave spots into simulcasts of college basketball tournament games. The platform was developed with the Disney Interactive Media Group.

ESPN360.com may be poised to grow its business model, which mirrors cable networks' dual revenue streams. Dollars are coming from carriage fees and advertising. Broadband providers pay ESPN to offer 360 free to their subscribers. And the new technology could improve the ad side of the business.

Dynamic insertion provides an advertiser with flexibility to swap particular spots in and out of a broadcast. While the system serves ads in live simulcasts, it arguably offers greater potential with archived games available for replay. It could also allow a marketer to remove a time-sensitive ad housed within a replay and plug in a new, more relevant one.

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In the short term, any heavier ad load may be appealing to 360 viewers. The site has filled breaks during games for years with a deluge of in-house promos -- for everything from ESPN sweatshirts to radio shows to ESPN360 itself. With so much time to fill, and the rapid frequency of promos, research could have hinted at consumer boredom.

ESPN has aired a limited amount of video ads on 360 during its life span, including a campaign for Cisco last year during college basketball tournaments. It's also run spots for Dr. Pepper and more recently, Jeep.

The insertion technology is being used in live simulcasts of at least 124 tournament games over the next seven days. After March 15, it will be used in the NCAA women's tournament and NIT games, then other events going forward.

ESPN said the technology uses an automated system that signals a commercial break and cues the planned spot. A banner ad for the brand can appear on screen for the length of the commercial.

Besides any increase in ad dollars, ESPN has ample opportunity to grow subscriber fees. The site is unavailable in the vast majority of broadband homes, with distribution limited to about 25 million. Several large cable operators have refused to pay what ESPN is charging to offer it.

ESPN says 360 offers 3,000 live events a year, many not carried on ESPN's networks. Among them are tournament games this week produced by regional syndicators, such as Raycom.

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