In Depth

Cut! Oscars Trim Price, Take Movie Ads

Academy Accepts Spots From Films for First Time; Spot Drop to $1.4 Million

ABC is slashing the price of an ad in the Academy Awards to $1.4 million—and for the first time the Oscars will accept ads for movies.

What’s that? You thought the broadcast always ran ads for films? It might seem so, but motion-picture ads were always banned in the Academy of Motion Picture Arts and Sciences broadcast. The intent was “to make sure that the viewer at home could not possibly believe—wrongly—that winners were known in advance or that studios had played any direct role in that process,” said academy spokesman Leslie Unger.

But now, in an effort to boost ads in the broadcast—which saw ratings flag to a historic low of 32 million viewers last year, down from 39.9 million in 2007, according to Nielsen Media Research—the network is said to have lowered its price for the Feb. 22 telecast from $1.7 million this year. ABC declined to comment on its pricing.

The academy had a change of heart in October when it came to movie ads, opening up the pool of potential advertisers, albeit with a hodgepodge of restrictions. Studios would not be allowed run more than one spot; advertise an entire slate of films; advertise sequels to any of the previous year’s best-picture, best-animated-feature or best-documentary Oscar nominees; include any text or spoken reference to the Academy Awards; or advertise any film opening earlier than the last Friday in April.

Now that the economic trade winds have shifted into an outright squall, however, one of those guidelines is being jettisoned. Insiders say the academy has dropped its insistence that an advertised film must open after the telecast.

That means more films can potentially advertise, and that could be good news for both ABC’s bottom line and Oscar’s self-esteem. Numerous sponsors, including FedEx and General Motors Corp., dropped out last year. The hope is that films will help fill the void, but while carmakers Hyundai and Audi have taken GM’s place, movie ads have not moved as quickly. Insiders say Paramount is mulling a buy for its drama “The Soloist,” and Warner Bros. is also looking to buy an Oscar ad for one of its films. But despite the price drop, so far only one studio film—Disney/Pixar’s “Up”—is known to be advertising during the telecast.

Some studio chiefs say the slow pace of ad sales has as much to do Hollywood’s labor unrest as it does with the economy and the academy’s ad restrictions. The Screen Actors Guild’s chief negotiator, Doug Allen, sent a letter to the national board this week asking to send the producers’ “last, best and final” offer—made last July—to the membership for a vote. Advertisers fear that a SAG labor stoppage could be lethal to the Oscars, just as last year’s Writers Guild strike was to the Golden Globes ceremony.

“That’s the only thing they have as a tool,” said one studio marketing chief, who insisted on anonymity. “They don’t have any other bargaining chips. ‘OK, fine, we can’t kill the Golden Globes, but fucking with the Oscars, that could happen.’”

Moviemakers should find a silver lining assuming the broadcast proceeds: Movie-ticket service Fandango, in a survey shared exclusively with Ad Age, found that moviegoers are roundly in favor of seeing movie ads on the broadcast. In Fandango’s study of more than 7,000 moviegoers surveyed online from Dec. 27, 2008, through Jan. 12, 2009, 41% of respondents said they were more inclined to watch this year’s show now that it can feature commercials for upcoming movies.

Some 69% of survey respondents said they watched the Oscars telecast last year, and 85% of them said they watched the broadcast live at home. By comparison, 6% DVRed the show, and 45% of those who did so said they wanted to skip to the highlights.