NCC’s breakthrough agreement to represent national advertising time on ESPN moves the operator-owned ad sales firm into new terrain within the cable advertising domain.
By pairing NCC’s political advertising sales operation with national inventory on ESPN, the arrangement offers the possibility of bringing incremental dollars to cable’s flagship cable sports network, which has relatively little presence in the maze-like world of political advertising.
At the same time, the deal breaks important new ground for NCC by suggesting the spot cable rep firm may have a role to play, at least in selected sectors, in serving as an extension of national network advertising sales organizations.
We think the deal is most notable for its tacit recognition of NCC as an expert in a political ad category that’s expected to shower TV stations, cable systems and national TV networks with $6.6 billion in ad revenue this election season, according to Borrell Associates estimates cited by the Wall St. Journal. Borrell thinks cable – networks and local sellers alike – will snare about 14% of the take, or roughly $900 million.
That’s enough to make ESPN (and potentially other national cable networks) take notice. But political advertising is tricky, requiring relationships with specialty media advisors and buying shops national networks don’t regularly pursue. NCC, in contrast, employs dedicated, full-time teams that pursue political dollars and maintain close contacts with political agencies. That gives NCC the confidence that it can make a profit on national inventory it has effectively purchased from ESPN, according to the Journal article today.
It also leads us to think similar deals could make sense for other cable networks, particularly those outside the news sphere, that see political as a promising growth area.
On that note, the alliance of NCC and ESPN offers some irresistible intrigue about the future of cable advertising and the possible blurring of lines between national and local/regional inventory. We’ve long suspected cable’s national networks could play a role, if they chose, in the sale and placement of advertising at a regional level – a turf that has historically been owned by local cable system affiliates. The ability to traffic advertising from central delivery points to multiple geographies is becoming a routine feature of new “dynamic” video-on-demand platforms that direct commercials to specific geographies and/or demographic indicators. It’s possible that similar technology could be used one day to parse national cable network inventory into regional subsets that allow the ESPNs of the world to play a role in the multi-billion dollar “spot” television ad sector. Doing so would require a full-scale revisiting of the inventory allocation agreements that now allot two or three minutes of “local” ad time per hour to cable companies. But the carrot could be lower carriage fees for networks that reclaim some of those local avails.
For now, though, that’s pure speculation. The significance of the NCC – ESPN deal is more straightforward: It pairs an experienced, knowledgeable political advertising sales team with a national cable network for purposes of selling inventory to a specialized market. The result, as the Journal article pointed out, is likely to be an uptick in the frequency of commercials on ESPN touting candidates and initiatives that have national relevance. Translation: Expect to see a lot of Mitt Romney and/or Barack Obama ads on football games this September.
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