Super Bowl, Olympics just aren't ad-ding up
Super Bowl, Olympics just aren’t ad-ding up.
It’s crunch time for the networks trying to unload $1 billion in ad time for television’s two biggest sporting events.
CBS is televising the Super Bowl on Feb. 7, and just five days later, NBC will follow with 17 days of Winter Olympics coverage from Vancouver, Canada.
“We are coming out of a very weak year,” said Brian Wieser, global director of forecasting at Magna, part of ad giant Interpublic Group. “Advertisers have certainly been selective about how they spend their budgets.”
The Olympics are expected to provide a lift to US ad spending, but not as much as in years past. According to Magna, the Games will boost US ad revenue by $487.5 million in 2010, down 25 percent from $650 million during the 2006 Winter Olympics.
NBC wouldn’t say how much inventory it has left, but ad buyers estimate it still has 20 percent to 30 percent to go.
Ad buyers blame the battered economy and the bad hand NBC was dealt when several major sponsors of the US team, including GM, Bank of America and Home Depot, bailed out.
Typically, NBC would hit up those sponsors to buy ad time during its broadcast.
“NBC had to start from scratch this year,” said Larry Novenstern, executive vice president and director of electronic media for Optimedia, an ad-buying firm. “I think they have done a good job, considering.”
Ads for the 2006 Olympics cost $500,000 to $700,000. In better times, NBC could have fetched $800,000 for spots during the Vancouver Games, but ad buyers said the network has had to be far more flexible on pricing.
NBC, which paid $820 million in 2003 for the US media rights to the Games, concedes sales are behind projections and said it expects to lose as much as $200 million.
“It’s just a tough time for a big event like that,” CEO Jeff Immelt of NBC parent GE said at an investor conference this month.
CBS is faring better with the Super Bowl, but not as well as the network would like everyone to believe. The network said it has sold about 90 percent of the available commercial time for the game, with prices for a 30-second spot running close to $3 million, up slightly from last year.
CBS insists it hasn’t cut prices, but ad buyers tell a different story. The network masks lower prices by packaging Super Bowl ads with inventory elsewhere, such as during the pre-game shows, they said.
“They are putting a rosy picture on it,” said one ad buyer. “You could be paying more than last year, but you buy a package of units, not just the Super Bowl.”
Last year, NBC said, it racked up $260 million in ad sales, including pre- and post-game slots. Although CBS officials remain optimistic about selling the remainder of the ad time, the ad buyer said it’s always the last 20 percent that is the hardest to sell.