In Depth

March Madness, Which Will Be on TNT, TBS, TruTV and CBS This, Is Practically Sold Out of Ad Time

By Brian Steinberg
Advertising Age

Commercial time during the NCAA men's college basketball tournament is virtually gone, despite the complications introduced by showing games on four channels instead of one.

March Madness, as the NCAA tournament is more commonly known, is nearly sold out of TV and digital inventory, said John Bogusz, exec VP-sales and marketing at CBS Sports, and Jon Diament, exec VP-ad sales and marketing at Turner Sports, whose TNT, TBS and TruTV are joining CBS in carrying the games and selling the attached advertising. That's the earliest the event has sold so much inventory in recent memory.

"It's a three-week event, and we can be selling during the actual tournament," said Mr. Bogusz said of tourneys past. This time most inventory sold out by February, Messrs. Bogusz and Diament said, though some is being held in reserve.

The new partnership between CBS and Turner, which helps CBS keep its hooks on the event despite exorbitant rights fees, means each game will have a national audience, rather than being broadcast in regional fashion, as had been the case for early match-ups. Fans can switch to the game they want, rather than depending on the network to hop from match-up to match-up depending on the action.

The evolution of the NCAA broadcast has broad ramifications. The mix of games available on cable, broadcast and digital "has the potential to change viewing habits," said Kevin Collins, senior VP-director of national broadcast at Interpublic Group of Cos.' Initiative, which represents MillerCoors, one sponsor of the event.

And advertisers are ready to dig into exactly how their commercials fare, said Francois Lee, VP-activation director at Publicis Groupe's MediaVest. "The whole experience is different," he said. With four networks broadcasting the games, he added, "you have to figure out how you purchase it across cable, how Nielsen's going to report it," and how ads will be slotted on each outlet.

Rather than looking at the ratings of a single broadcast, advertisers will add up the ratings points of broadcasts across CBS, TNT, TBS and TruTV.

The networks, meanwhile, have had to figure out new contingency plans in case ratings fall short of their promises to advertisers. In years past, CBS could simply make up any shortfalls with ad time in other sports broadcasts on CBS. Under the new agreement, however, inventory that is solely CBS's or Turner's may not always be available for use as "make goods."

"We have actually been a little bit conservative with our ratings estimates," said Mr. Bogusz. "We have inventory to make people whole if for some reason the ratings don't deliver what we're anticipating.

"It will be a work in progress in terms of us taking care of our clients," he added, but there are no problems expected if the networks need to offer make goods.

The two networks have also had to, in some cases, let one or the other handle a particular sale, depending on the relationship each has with different marketers. In some cases, CBS may have taken the lead with a client that has had a longtime TV presence in the event, ad buyers said; in other cases, Turner may have taken the lead on offering a broader digital package to a new entrant. With revenue split between the two companies equally, said Mr. Diament, "we communicate with each other on each and every account, and we share intelligence and we make joint decisions."

Maintaining a smooth sales process is critical for both parts of the whole. The two companies will spend $10.8 billion over 14 years for the rights to broadcast the three-week tournament, which has been expanded to 68 games from 65, on TV and through digital means. Advertising will be a key driver of securing a return on that outlay.

Hundreds of millions of dollars are at stake. Advertisers spent an estimated $613.8 million on the contest last year, up 4.3% from 2009's tournament but still short of the $643.2 million spent in 2008, according to WPP's Kantar Media. Between 2001 and 2010, more than 280 different marketers spent more than $4.8 billion on the NCAA tournament, Kantar said.

Depending on when the ad runs in this year's tournament, the price of a 30-second spot can cost anywhere from $100,000 in the early match-ups to what some buyers suggest would be somewhere around $1.2 million to $1.3 million for an ad in the final few games. Others familiar with negotiations suggest the networks are seeking as much as $1.5 million for top-tier ad berths.

As is the case each year, the NCAA tournament already has a list of prominent supporters that agree well in advance to purchase broad sponsorship packages. AT&T, Capital One and Coca-Cola are the top tier of sponsors, whom the networks call "corporate champions," while Enteprise Rent-a-Car, The Hartford, Infiniti, LG Electronics, Kraft Foods' Planters nuts, Unilever, Hersheys' Reese's Peanut Butter Cups, Lowe's and UPS stand in the second tier, also known as "corporate partners."

Auto advertisers will be strong in the tournament, said CBS's Mr. Bogusz, and telecommunications players and fast-food marketers have also shown strong interest.

The NCAA tourney carries other benefits for the networks. CBS can promote its shows to the large basketball audiences heading into the crucial final weeks of the 2010-2011 TV season, and airing the event boosts the perception of the network as a "Tiffany" media outlet. For Turner, the stakes may be even greater. Many games are likely to produce greater ratings than what's normally on the air on TNT, TBS and TruTV. Indeed, the first four games of the tournament are slated for broadcast on TruTV only, and will help Turner promote the reality fare for which that channel, brought into the Time Warner stable a few years ago, is best known.

At present, ad buyers are guardedly optimistic that the new method for transmitting the games will perform well. "We like to think there's going to be upside, but time will tell," said Jeremy Carey, U.S. director at Optimum Sports, a unit of Omnicom Group's Omnicom Media Group.

Although the new structure presents some challenges, it also opens new opportunities. Fans watching games on one of the cable channels will be routinely told how to view other match-ups taking place at the same time, particularly if the game on screen seems to be lagging or is a blow-out, said Mr. Diament.

The NCAA has for many years forbid any sort of in-game signage, a staple of TV broadcasts of professional games, but the new arrangement also creates more opportunities for "studio shows," the pre- and post-game analysis and chatter programs that can incorporate advertisers. Those will include "Infiniti NCAA Tip-Off," " AT&T at the Half" and "Inside March Madness presented by Buick." #