CBS’s latest big sports adverting sales effort-for the NCAA’s March Madness basketball tournament-is going well this year after a problematic round in 2003.
CBS is inking deals at modest 6 percent to 8 percent price increases on average for the two-week tournament. Thirty-second spots in early-round games are going for $55,000, while 30-second ads in late-round games fetch $600,000. Media executives said the NCAA Championship Game is now being priced at $900,000 per 30-second commercial, up 6 percent to 7 percent vs. last year’s game.
“It is very well sold,” said one veteran media agency executive, “which is somewhat surprising, considering the [weak] scatter market.”
John Bogusz, executive VP of sports sales for CBS, said the network is 80 percent sold so far and is selling at a quicker pace than a year ago. “It’s been pretty steady over the last couple of months,” he said.
CBS said it didn’t miss a beat after the Super Bowl, as advertisers immediately turned their attention to buying the next big sports event. “We had a healthy week upon our return from the Super Bowl,” said Jo Ann Ross, president of advertising sales for CBS.
CBS had a lot from which to recover. Last season the network consistently had to break into its tournament coverage with news of the war in Iraq, and some games were shifted to ESPN, all of which hurt ratings. The championship game, featuring Syracuse and Kansas, dropped to an all-time-low Nielsen Media Research 12.6 rating/19 share. That score was down 16 percent from a 15.0/24 the year before. CBS had to offer many make-goods to advertisers.
“It was a disaster,” said one veteran media agency executive.
Now CBS is looking to get back on track.
“NCAA has a passionate fan base and the unique nature of the tournament creates an unusually dedicated viewer that is hard to reach-the young male viewer,” said John Rash, senior VP of national broadcast for Campbell Mithun, Minneapolis.
Among other deal packages, CBS is selling a strip of commercials-one commercial in each game of the 63-game series, including the championship game-for $6 million. Advertisers, however, can buy any variation of advertising packages.
CBS typically starts out each year with some 40 percent of its commercial inventory sold because of its long-term or multiyear deals. Beginning last October, CBS had the added responsibility of selling the NCAA’s overall league sponsorship packages. Consumer product companies with NCAA sponsorship deals are allowed to use the NCAA trademarks and other images in their marketing plans.
Chris Simko, senior VP of sports sales and marketing for CBS, said working on these deals, which also include regular-season basketball, help sell the big tournament. CBS made deals with Coca-Cola, General Motors’ Pontiac division and Cingular Wireless to be major “champion” sponsors in the event, with each sponsor spending about $20 million to $25 million per package. Smaller-tiered sponsors, known as “corporate partners,” are Kraft Foods and Monster.com, which spend about $8 million to $10 million.
“We were actually active with basketball in September and October,” Mr. Simko said. “A couple of years ago it would lag into December and January.”
Media agency executives said typical advertiser packages go from $4 million to $6 million. Additional NCAA advertisers this year include Enterprise Rent-a-Car and Capital One, among others.
CBS assumed a role in selling the sponsorships to help recoup the pricey 11-year, $6 billion deal it started with the NCAA last year. This year, one media executive said, “there are issues involving the renegotiation with the corporate partners. That’s the biggest hurdle.”
The NCAA Championship Game has seen better days in terms of ratings. Over the past four years the game has averaged a 14.3 rating. But having to pay nearly $1 million a spot, many executives consider this specific game somewhat wasteful.
“It is the most inefficient sport game to buy on television,” said one veteran media executive. “It’s disproportionally priced.”
“You could get an AFC Championship Game for roughly the same cost, but that does a lot higher rating, about a 25 rating,” said another media agency executive.
For instance, one agency executive said, at just about $1 million per spot, the NCAA Championship Game would yield a whopping $61 cost per thousand viewers for the adults 25 to 54 demographic-more than twice that of other tournament games or other sports. But media agency executives say advertisers love to be in the big game for its prestige value. “We tell them, `Why not take that money and buy other playoff games?”’ said a media agency executive who buys for computer and technology companies.
The NCAA Tournament has remained a programming and advertising jewel for CBS because it is the only high-rated sporting event in the spring. CBS also benefits because the April through June period is typically the highest-demand time for national TV advertising, media agency executives said.
“Once you get beyond the NFL playoffs and the Super Bowl in the calendar year, there is nothing else until you get back in the World Series in October,” said one veteran media agency executive. “The NBA can’t even pop a number like that.”
CBS generally guarantees different ratings for each group of games. Early-round games are set at around a Nielsen 4 to 5 household rating. The next round of games-including the Sweet Sixteen and Elite Eight-are guaranteed at a 7 to 8 rating. The NCAA Final Four games are promised with a 10 to 13 rating. Then the final is typically set at a 17 to 18 rating mark.