Digital sports should hold its value (as long as we don’t sell ourselves short)

The Web 2.0 Conference is underway in San Francisco. As always, Mary Meeker of Morgan Stanley took the stage to deliver her “State of the Internet” address. On the surface there’s a lot of bad news for marketers in herslide deck. Down economy. More unsold impressions. Falling CPM. But there are a couple things she present that I’d like to echo and amplify as they should help those of us working in digital sports.

The slide above shows how social sites like Facebook and YouTube have gained share, while portals like Yahoo and MSN are losing ground. This speaks to the power of social media to drive user engagement, something we’re seeing BIG TIME on sites like mycolts.net; but all these additional (unsold) page views has a depressing effect on the average value of ads on the Web. From 2005 to 2008, the average price paid for a static banner has fallen from $3 to $1.50, and the average rich media ad has fallen from $35 to $20. Media buyers will continue driving these prices down as long as there are more and more unsold pageviews out there. So here’s a gentle reminder…

WE ARE NOT SELLING MEDIA! WE ARE SELLING SPONSORSHIPS

Yes, we have to show our sponsors value. Yes, we need to justify our prices with traffic figures, but if we try to compete toe-to-toe with BIG MEDIA, we’ll get slaughtered. So I suggest we do what we’ve done so well for so long…sell the value of fan engagement. To do this, we should focus on the following selling points:

1. We reach AVID Fans - Sponsors want to line up their brands next to our properties because fans LOVE us. The most AVID fans are the most likely to support sponsors who support the sports property, so we need to stress that our digital channels are the cleanest way to reach the most avid fans of our property. No media can compete for pure reach to our avid fans. That should carry a premium price.

2. We can GEO-Target – Most sponsors buy team sponsorships to reach fans in a particular city. Let’s set aside for a minute that there’s HUGE opportunity to reach fans outside the home market, and just talk about geo-targeting. Using your ad server, you can offer sponsors the ability to reach ONLY the avid fans in your home market…so that every dollar they spend reaches passionate fans close to their outlets or stores. When you can deliver geographically targeted audiences, the sponsor will again pay a premium

3. Timing – Our sites tend to get the most traffic during games, espcially when those games are on television. When a sponsor wants to activate on your Website to enhace what they are doing on TV, and you can deliver sponsor message to the right target, at the right TIME, you can charge a premium. Keep in mind, that most sports sites generate lots of impressions between events and even in the off season. Another way to make more money from your Website is to not give away those impressions. Instead, you can package them and sell them…ironically, as media if you want to. In limited cases, taking a few cents per impression is better than getting $0.

This is just a quick overview of the opportunities coming down the pike in digital sports. If you want to talk about how your team or property can tap into these ideas, give me a call 317-332-7878.

Meanwhile, the other things Ms. Meeker discusses in her slides is the growing importance of mobile now that 3G is becoming better established. The slide below shows how audiences are consuming sports content on TV, Mobile and Web simultaneously. With the spread of 3G, we expect mobile applications to continue to grow in importance, especially in the younger demographics, and as Ms. Meeker points out, in emerging markets.