NEW YORK With eight months to go before the competition begins, NBC is striving to break at least one record of its own leading up to the Beijing games: ads sold for two consecutive weeks of Olympics programming.
And the network is well on its way. It has sold "a little over two-thirds" of the inventory it intends to sell in its coverage, according to Seth Winter, svp, NBC Sports and Olympics sales and marketing. With a goal of $1.1 billion to $1.2 billion in ad sales, that would put the current tally at between $750 million and $800 million. A $1.1 billion total would be a new high mark for Olympic ad sales, and would top the previous record set fours years ago for the 2004 Athens games by 10 percent. The strategy for getting there: a combination of higher pricing with a lot more inventory. Prime time broadcast rates are up about 10 percent versus 2004, to $750,000 per 30-second spot, while three times as much programming—some 3,600 hours in total—is planned.
Winter said he'd just concluded a multimillion dollar deal with AT&T, and Samsung is also expected to finalize a major agreement soon, after months of negotiations. A number of other big sponsors have already ponied up for Beijing, including Coca-Cola, McDonald's, Anheuser-Busch, General Motors, Visa and Bank of America, Johnson & Johnson, Nike and Hilton hotels, he said. Procter & Gamble, Kraft, Subway and Target are also onboard. Winter said a number of other undisclosed deals were "in the pipeline."
Official Olympic sponsor Allstate Insurance has opted not to buy network time, said Winter, who added NBC is now talking to others in the insurance category. Allstate confirmed it has no NBC deal, but a rep said it was "in talks" on several Olympics-related projects. Kodak, which is not renewing its sponsorship of the games, also opted out.
Buyers said that NBC's sales pace for the Beijing games, which will air Aug. 8-24, was in line with previous Olympics. They also said that the games are one of the best program platforms the network has to offer this year, at a time when NBC has been forced to give cash back to some advertisers due to poorly performing entertainment shows.
"High-rated events like the Olympics are few and far between these days," which is why they continue to appeal strongly to many advertisers, said Andy Donchin, director of national broadcast for Aegis Group's Carat.
Several factors are working in the network's favor with respect to the sales effort, buyers said, not the least of which is that sporting events tend to be TiVo-proof, as most of the viewing is live and not subject to the ad skipping that DVRs enable.
The Olympics are also strike-proof and may be an even bigger draw for advertisers if the writers' strike drags on, curtailing the amount of original programming this season. "With the writers' strike, we'll see what money comes back to us that maybe we'll need to find another home for," said Donchin.
Strike aside, August tends to be short on original programming making the Olympics a standout network franchise then. "It's a great place to be for anybody who needs to jumpstart the fourth quarter," said Harry Keeshan evp national broadcast, PHD. said. Factor in the smaller audiences this year for many network shows and the same or greater demand for time, he said, "and we're all struggling to meet the rating points we need."Winter said the writers' walkout has already diverted ad dollars from strike-affected shows into sports programs this season, particularly the NFL, which has achieved a "record level" of advertising in part due to those shifts. He also indicated that he's had conversations with some advertisers looking to possibly shift dollars out of struck shows to the Olympics.
The network is selling packages (not stand-alone spots) that mostly range in price from $2 million to $20 million. (Winter wouldn't discuss guarantees, but buyers said they included a 14.5 household rating for broadcast primetime.) Smaller packages, which could be quickly devoured by broadcast prime time, could be weighted toward cable or weekend play. "That's very appealing to clients who may not have the biggest budgets," said Keeshan.
That said, the network is turning down marketers seeking digital-only deals in favor of agreements that cover all, or at least most, of the media platforms. "We're trying to be judicious, because we think demand is going to outstrip supply" of digital inventory, Winter said.
Last week NBC struck a deal with Microsoft to deliver NBCOlympics.com on MSN, designated as the "official U.S. online home" of the Beijing games. Online viewers will have access to more than 3,000 hours of live and on-demand content.
In addition to NBC, coverage will air on the USA, CNBC and MSNBC cable networks; Spanish-language network Telemundo; online; mobile; and VOD. "We want to push the content wherever we can," said Winter.
And despite recent news stories suggesting that Beijing is teeming with people gasping their last breath due to air pollution, NBC is using the locale as a selling point to advertisers. And to some extent it's working, buyers and clients said. "In many ways the games are China's coming out party to the world," said a rep for Olympic sponsor Bank of America. Donchin of Carat agreed: "I believe there is more of a bump in terms of interest because of the location."
The steroid scandal surrounding former Olympian Marion Jones does not appear to have dampened advertiser interest in the games. "It's not an overriding concern," said Keeshan. Winter's take is that the steroid issue "goes across all sports and most of them are doing their best to address the problem."
The 12-hour time difference has hurt the viewing of past Olympics in Asia because the results of competition were known before the events aired in the U.S. For the Beijing games, however, the network worked with Olympic officials to schedule popular events like swimming, diving, track and field and beach volleyball in the morning hours Beijing time so they will air live in prime time in the U.S. In the first week of the games, about two-thirds of events will air live in prime time, and slightly less than that in week two, Winter said.