Advertisers Nuts Over March Madness

Mar 12, 2008  •  Post A Comment

Like college basketball fans, marketers are crazy for March Madness.
The annual NCAA Men’s Basketball Tournament broadcast by CBS draws some of the highest ad rates of any programming on television. While others do the bracketology to figure out which teams will be among the 64 squads that will be invited to the big dance, TNS Media Intelligence has put together a scouting report on the event as a media property.
“As a sports marketing event, the collegiate basketball tournament is part of a Final Four alongside the Super Bowl and the Summer and Winter Olympics,” said Jon Swallen, senior VP of research at TNS Media Intelligence. “The popularity of March Madness extends to a broad, diverse cross-section of the population and this makes it a valued opportunity for certain marketers.”
CBS pays the NCAA a license fee of about $529 million for exclusive TV, digital, radio, publishing and merchandising right to the tournament, according to TNS.
March Madness is expected to generate $545 million in network ad sales this year, up from $519.6 million last year. Over the past 10 years, TNS estimates, the tournament has generated $3.83 billion in network ad spending by almost 300 marketers. Last year, 126 advertisers bought ad time during the games and in pre-game and post-game programming.
The NCAA Men’s basketball championships also are in the final four when it comes to ad prices. In fact, among sports, only a 30-second spot in the Super Bowl costs more than a spot in the NCAA Championship game. The college final tops the major college football games, the NBA Championships and Major League Baseball’s World Series, according to TNS.
TNS pegs the average price for a spot in the NCAA final at $1.26 million and says a spot in one of the semi-final games costs a whopping $698,000.
The average Super Bowl spot cost about $2.4 million, while the AFC and NFC Championship games generate $972,000 per 30 seconds. Among other events, the college football Bowl Championship Series drew $900,000 for a spot, while other major bowl games averaged $510,000. World Series spots were $425,000 apiece and NBA Finals spots were $389,000.
About 80% of CBS’ March Madness ad revenue comes from repeat sponsors, a figure TNS said signals above-average retention compared to other sporting events.
General Motors is usually the top spender during the tournament, averaging about $70 million over the past five years. GM’s spending accounts for as much revenue as the next four largest advertisers combined.
Following GM in the ranking over the past five years are Coca-Cola, which averages about $22 million a year; AT&T, which spends about $21 million; Anheuser-Busch, $16 million; and SABMiller, at $13.8 million.
In addition to TV, where at least some part of the tournament is seen by 130 million people and the final is seen by 40.3 million viewers, CBS has been streaming early-round games on the Internet.
While Web viewing is growing rapidly, TNS said the online video audience is still dwarfed by the traditional broadcast TV audience, accounting for less than 1% of total viewing.

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