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ESPN Will Soon Get Paid For Out-Of-Home Ads, But What Does That Mean?

ESPN Will Soon Get Paid For Out-Of-Home Ads, But What Does That Mean?

Walt Disney Co (NYSE: DIS)’s ESPN just made what could be a landmark step toward the future of TV advertising. This week, the network announced it has finalized an advertising deal that specifically includes an out-of-home TV audience. ESPN is the first network to negotiate such a deal.

The identity of the buyer has not been revealed, but Ad Age describes it as a “major agency holding company.”

Out-of-home viewers include the ESPN audience who watches its content in bars, restaurants, hotels, fitness centers and other public venues. Many potential advertising clients reportedly objected to the idea of specifically addressing the out-of-home audience because that segment of the audience has historically been baked into the negotiated price of ad deals.

“This is more than us getting compensated for all those ‘lost’ out-of-home impressions,” ESPN VP Eric Johnson explained. “It’s about capturing consumer behavior in an environment that’s changing radically, and learning from the data.”

Related Link: Subscriber Growth Woes Continue To Haunt Netflix; Company Could Be A Legitimate Target For Disney, Apple

Networks have been trying to convince advertisers to pay for out-of-home audiences since ABC tried to get clients to factor in out-of-home “Monday Night Football” viewers back in the 1980s. Not a single advertiser agreed to pay extra for out-of-home viewers.

That trend continued until ESPN’s new ground-breaking deal. The new deal could represent the beginning of a trend for networks and video content providers as the advertising world tries to adapt to the new world of cord-cutting and digital connectivity.

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