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ESPN Expects to Strike Ad Deals for Live Viewers Across TV, Mobile, Digital Screens (EXCLUSIVE)

ESPN hopes to score a touchdown in a growing competition: measuring audiences who are watching TV programming in ways other than using a TV.

As the Disney-and-Hearst-owned sports-media giant makes a presentation Tuesday morning to advertisers, executives will tell the audience ESPN is ready to do ad deals based on a new metric that tabulates live viewers no matter what screen they may be using to view the company’s content.

Mapping out live viewers is of critical importance to TV networks, which are working furiously to monetize a digital audience that no longer watches traditional TV as robustly as past generations. And finding those viewers is important for Madison Avenue as well. A live-sports event is viewed “all at once by large audiences, and its ads are not skippable,” said Michael Piner , a senior vice president of strategic investment at Magna, the Interpublic Group media-research unit.“We need to count all the viewers, and to count them all no matter what screen they are on,” he said.

The company will be ready to sell a measure of total live audience, which will include live-streaming of ESPN and ESPN2 programming as well as so-called “out of home” viewership, both measured by Nielsen.  ESPN will roll live-streaming viewers into its ratings, while out of home audience – people who might watch the company’s sports content at a hotel, bar, restaurant or elsewhere – will be added to viewership for clients that choose to use that measure.

Starting October 1, the live-streaming numbers will also include viewers who watch ESPN or ESPN2 programming with the same “ad load” as a traditional TV broadcast.

Many digital outlets offer “measurement that isn’t verified by a third party,” said Ed Erhardt, ESPN’s president of global sales and marketing, in an interview. “We are first to market with a total live audience number, one that is verified and able to be graded” by agencies and advertisers.

ESPN stands to see a significant lift in viewership.  The company said live-streaming and out-of-home viewing facilitated through cable and satellite providers goosed its overall first-quarter audience by 12%, and its viewers between 18 and 34 by 18%. The statistics do not include viewing done through the company’s mobile Watch ESPN app.

Clocking viewer whereabouts is a task ESPN needs to accomplish if it wants to remain viable in the near future. The company has come under scrutiny in recent months for declines in traditional cable subscribers, who for many years helped fuel the economics of ESPN’s stock-in-trade: securing big-ticket live sports events that come with substantial rights fees. Without monetizing a new generation of audience, ESPN will have to continue to pare costs. Already, the company has in the last few weeks reworked its signature program, “SportsCenter,” and laid off approximately 100 staffers.

The new measure would help, particularly when viewing of sports on national media properties is flat year to date, according to May research from Brian Wieser, a media-industry analyst with Pivotal Research Group. Disney properties account for 35% of overall sports viewing year to date as of the first 19 weeks of the year, Wieser said, but is off 4% compared with the year-earlier period.

But ESPN has been working for several years to make this measurement possible. In recent years, ESPN has talked to advertisers about the value of a live viewer impression, no matter the screen on which it took place. Last year, ESPN began striking ad deals based on out-of-home viewership with those advertisers who elected to do so. Staffers have also worked to watermark the bulk of ESPN content so it can be tracked and identified when it airs on different screens – and then be used to establish viewership.

“This has been a journey of establishing and fortifying different concepts, and has come together over the last three years,” said Erhardt.

ESPN is the latest media company to strike out on its own in the absence of an accepted industry-wide measure that examines viewers across multiple screens and behaviors.  Executives at many of the nation’s traditional media companies say devising such a yardstick is urgent, but they have also found the task onerous and complicated.

ESPN’s decision could bolster an effort currently underway to help establish a single industry-wide measure for viewers across screens. GroupM the WPP-owned media-buying agency, is working with multiple TV companies to establish a new measure that examines multiple kinds of viewing and relies on tracking viewership of commercial breaks from traditional “linear” TV broadcasts.

Whatever the new methodology, establishing one is of paramount importance. “The need for counting all available impressions has increased, no matter where they are,” said Piner, the executive at Magna. “We all have to come to the table.”

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