Why Bill Simmons isn’t the cash cow you might think

Explore Harvard's Nieman network Nieman Fellowships Nieman Lab Nieman Reports Nieman Watchdog Nieman Storyboard

This week in review: Facebook’s future and the open web, and finding balance on breaking news nie.mn/yrRbkW

Why Bill Simmons isn’t the cash cow you might think

Our own Jason Fry wrote a post worth reading on web economics at Deadspin, the Gawker Media sports site. It’s about Bill Simmons, the star columnist for ESPN.com and one of the bigger web-native journalism stars the Internet has produced. His stories generate huge traffic from a very loyal (and advertiser-friendly) audience.

Simmons is in the middle of negotiations to renew his contract with ESPN, and Fry tries to answer the question: How much is a guy like Simmons worth to a multibillion-dollar company like ESPN? The answer: Not as much as you might think:

Let’s do some back-of-the-envelope calculations. Back in November, comScore said that Simmons’s column had averaged 1.4 million pageviews and 460,000 unique visitors a month over the previous six months. His podcast, the B.S. Report, is typically downloaded 2 million times a month. The Book of Basketball sold more than 208,000 copies in 2009. And the Sports Guy has 1.19 million Twitter followers…

Given an estimated ad rate of $10 per 1,000 views (CPM in Web lingo), Simmons’s columns would be worth some $168,000 a year to ESPN. The podcasts are presented by Subway, while Miller Lite also sponsored a weekly Simmons NFL pick — but both of those sponsorships are likely part of larger multimedia crossover deals with ESPN. It would be a stretch to credit more than $400,000 of that money to Simmons, or to say those sponsorships wouldn’t have been attached to other Web content in his absence. The Book of Basketball — published by ESPN Books and Ballantine — has likely brought in nearly $300,000 for ESPN (and considerably more than that for Simmons), but not even the prolific Sports Guy can write a bestseller a year.

But the raw numbers miss a big part of Simmons’s value to ESPN — which is where those 1.19 million Twitter followers come in. “How many publications would like to have that kind of readership right now?” asks Sports Business Journal’s John Ourand, who notes that while Web dollars are a fraction of ESPN’s overall revenues now, they’re growing.

Jason’s numbers are indeed back-of-the-envelope, but it’s worth noting that CPM advertising represents only a small fraction of the financial value Simmons brings. The larger share comes from companies who specifically want to attach themselves to his brand (Miller, Subway) and from ancillary products like his book. (I don’t know if Simmons does speaking gigs, but I’d think that would be another serious potential revenue stream.) And one of his most valuable assets is his following on Twitter.

Lesson: Even huge audience numbers are unlikely to generate major revenue if they rely on boring old display advertising for monetization. A strong, identifiable brand and the power to assemble a community of readers — that’s where the money is.

What to read next

Mark Coddington February 10, 2012

This Week in Review: Facebook’s future and the open web, and finding balance on breaking news

Plus: Parsing The New York Times’ paywall figures, a big nonprofit news merger in the Bay Area, and all the rest of this week’s news in media and tech.

http://Flavors.me/howard Howard Weaver

And what, if we don’t count advertising, does this strong identifiable brand and assembled community of readers do that generates revenue?
http://www.niemanlab.org/ Joshua Benton

Well, it sells books. It brings big crowds to the signings for those books. It does things like promote Simmons’ “30 for 30″ documentary series. It does things like dictate what chants the crowd will use at the final Celtics-Cavs game, which gets Simmons written about, which grows the community more. It also frankly, gives a guy like Simmons more power in his own negotiating sessions with his employer, since his readers are more likely to follow him elsewhere than would be the case if he didn’t have such a strong brand or group of readers.

But who’s saying don’t count advertising? My point is to distinguish between the kind of advertising that sells branded access to a specific devoted audience — like the Miller/Subway examples — and the straight CPM/pageview advertising that many news orgs are still stuck selling, both because of lack of scale and because of lack of branding and audience loyalty. In other words, Howard, you can be the biggest sports columnist on the web, on the biggest sports site on the web, and if you’re only focused on CPM, you’re still not making huge money.
http://Flavors.me/howard Howard Weaver

Oh, the dynamics of NOT making huge money are well understood, Josh. I was hoping you’d discovered an alternative for the professional press. This “lesson” didn’t seem to suggest one (nor does your elaboration, to me, but I plan to think more about it.) Thanks for engaging this question/issue).
Cody Tipton

I had the same question as Howard. It seems like you’re pointing out that Simmons’ success lies not in pageviews but in building a brand to which Subway and Miller Lite want to align themselves. The article you quote, though, suggests (and I agree) that those companies would probably just align themselves with other ESPN web content in Simmons’ absence. Is there any indication that Simmons’ popularity is bringing in advertisers that wouldn’t already work with ESPN?
Frank

Yeah Jason Fry, clearly not a prolific business mind. The brand impact of someone like Bill Simmons is what makes him so valuable. He brings countless eyeballs to ESPN.com that would otherwise not be there as often, which in turn creates free advertising for everything their website and networks offer. As well as a greater commitment by readers as they grow to like the brand more.

Someone can like Bill Simmons, but then maybe they sign up for fantasy baseball after seeing an ad while reading one of his articles, now they’re going to the ESPN fantasy site everyday. And maybe while there they notice ESPN has all the sports scores conveniently provided at the top bar of their website, so they quit using Google to look up scores and now go straight to ESPN.com. And while they’re checking scores they see ESPN’s headline article which is really just sly advertising to spread awareness that their showing the X-Games, or college girl’s softball, or whatever, and now they’re watching a sporting event on TV they wouldn’t have otherwise bothered with.

All pretty obvious ways cross advertising works, of course, but you want people who serve as “motors” to get the whole process started, and that’s what someone like Bill Simmons provides.