$1.2 Billion and Counting: How NBCUniversal Secured Its Biggest Olympics Advertising Windfall Ever

The time zone-friendly locale certainly helped

No matter what the final medal count looks like at the 2016 Summer Olympics, NBCUniversal is going to be Rio's big winner.

One day before the games even begin, the company has already set an Olympics record with more than $1.2 billion in national ad sales, which includes broadcast, cable and digital advertising. It's said to be the most by any network for any media event in U.S. history.

"We've surpassed what we thought was at one point an unobtainable threshold," Seth Winter, evp, ad sales, NBC Sports Group, told reporters on a conference call from Rio today.

That is more than 20 percent ahead of its sales for the 2012 London Olympics, with about 75 percent of that revenue coming from NBC's prime-time coverage of the games, said Winter. (According to data from Kantar Media, however, the Summer Games in London saw $1.33 billion in broadcast and cable ad spending, a figure that didn't include digital.)

Sales have been strong across both linear and digital platforms with digital sales 33 percent above London's levels. The strongest categories include automotive, beverages, telecommunications, insurance, movie studios and pharmaceuticals, as advertisers are "exceptionally bullish on this Games," said Winter, who indicated at least one presidential campaign has also purchased Olympics advertising.

Winter said his team hit its Olympics ad budget, which was 15 percent higher than that of the London Games, three weeks ago. In March, NBCUniversal said it had surpassed $1 billion in national advertising sales for the Rio Olympics, four months earlier than the 2012 Games in London. (In 2012, NBC didn't reach that mark until two days before the opening ceremony.)

Those sales were fueled by more Olympics coverage this year—and therefore more available ad inventory—than ever before. NBCUniversal is offering 6,755 hours of Rio Olympics programming overall, including 2,084 hours of coverage across 11 linear networks. NBC alone will air 260.5 hours of coverage.

While the last Summer Games in London was six hours ahead of the the Eastern time zone in the U.S., Rio is just one hour ahead, meaning that much of NBC's prime-time coverage will be live and most likely boost ratings. (However, the opening ceremony will be broadcast and streamed on a one-hour delay.)

Winter echoed comments from NBC Olympics executive Jim Bell on Tuesday that news about the various problems in Rio leading up to the games is actually driving interest in the Olympics and could make the games the highest-rated ever.

The 2012 Olympics averaged a 17.5 household rating—which is the demo it uses to sell its Olympics inventory—and 31.1 million total viewers in NBC prime time. (2014's Winter Games averaged a 12.3 household rating, with 21.4 million viewers.) This year, NBCUniversal guaranteed advertisers household live-plus-same-day ratings "in the high teens" for NBC's prime-time coverage, Winter told Adweek.

Beyond the expected ratings surge, "we have three times the combined ratings on any given night during the Olympics of ABC, CBS and Fox. So that kind of appeal, if you're marketing an automobile, or a beer, or a car, it's just a tremendous value proposition," NBCUniversal president and CEO Steve Burke said during last week's earnings call.

Not including production costs, NBC is paying approximately $1.28 billion for rights to the Rio Olympics. While the network broke even during the 2012 games and made a small profit during the 2014 Olympics in Sochi, Burke said "we're looking at a very profitable Olympics," between national ad sales, local advertising at NBCUniversal's owned and operated stations, affiliate fees and digital business. "We made $120 million or thereabouts in London, and we are going to make a lot more than that in Rio," he said.

Adding to the company's Olympics haul this year will be revenue from the content and ad-sharing deal it struck in May with Snapchat, to create a dedicated Discover channel that will feature Olympics content. BuzzFeed, which NBCUniversal invested $200 million in last August, will also populate that Discover channel with short clips and behind-the-scenes content.

During previous Olympic Games, "advertisers migrated to Twitter and other existing social platforms. This is the first where we've gone in such a pervasive fashion with Snapchat and BuzzFeed," said Winter.

"As you think about the way that the marketplace has matured, it's harder and harder for marketers to get attached to premium content. And obviously, with something as sought-after and high profile as the Olympics, they want to get attached to that content and follow the consumers that are interacting with that content, no matter what screen. So I think the agencies and clients have really leaned and said, 'For 17 days, when this country really consumes nothing else, let's stay with that content and follow those passionate consumers across every screen,'" said Linda Yaccarino, chairman of advertising sales and client partnerships, NBCUniversal.

Meanwhile, Winter and Yaccarino aren't finished selling Olympics inventory. "We're pretty much sold out of all of our premium inventory," Winter told reporters today, but his team can find "solutions" for advertisers who want to come in during the games.

"This is such a unique games in that it's a live games," Winter told Adweek earlier. "And just based on our London performance—which was startling to us, because we expected to do significantly less than we actually did in London—our expectations are pretty grandiose."

Added Yaccarino, "The high profile stuff is pretty much gone, but it's been really exciting. We've exceeded every number that we set out to hit."