Oscars Telecast Racking Up Ads

Nov 22, 2004  •  Post A Comment

Despite the current weak TV advertising market, ABC is booking advertising business for “The 77th Annual Academy Awards” at a faster rate-and at higher prices-than in previous years.

The show, to be broadcast Feb. 27, 2005, had only one or two 30-second commercial slots remaining to be sold late last week, media buying executives said. ABC is on pace to pull in $87 million to $90 million in advertising revenue for the 2005 program. The network pulled in $84 million in ad revenue for the telecast this year, according to media agency executives’ estimates.

In deals or deal renewals made earlier this year, media buyers said, the network averaged $1.45 million for a 30-second spot, slightly up over the year before. But because of ABC’s brisk business, some sponsors were said to be paying at or above $1.5 million more recently.

For the Academy Awards, many major incumbent advertisers have the right of first refusal on the next season’s event. Procter & Gamble, General Motors, Pepsi, Time Warner, Home Depot, Eastman Kodak, JCPenney, McDonald’s Corp. and American Express are among the advertisers that sponsored the show last year.

According to media executives, a new and important addition this year is L’Oreal.

ABC has been trying to add a big-name cosmetics company for the past four years, ever since Revlon-once a major Oscarcast advertiser-left the show. For Revlon, which regularly bought as many as 10 spots in the program, the Oscar presentation was a natural place to meld the glamour of cosmetics with the glamour of the biggest entertainment awards show of the year.

Though ABC had no trouble selling those spots individually to advertisers, it continually tried to pitch L’Oreal on a similar big package, according to media buyers. But L’Oreal wasn’t interested in following Revlon’s game plan until this year.

“Now, after five years, L’Oreal is looking to step up,” said a veteran media buyer.

An ABC spokeswoman wouldn’t discuss specifics except to say, “We are very well sold, and very pleased with our position.” A L’Oreal spokeswoman couldn’t initially comment and didn’t return subsequent phone calls by press time.

For years, ABC has sold major advertisers multiple-spot packages: six to eight 30-second commercials per show. For these big deals, advertisers become exclusive sponsors in such categories as beer, fast food, financial and automotive. Because ABC sold more inventory early this year, less ad inventory than usual was available later in the year and the remaining spots commanded higher prices.

Early in the summer, ABC put some potential advertisers on a waiting list. “That’s when I knew business was strong,” said one veteran media buying executive. On hearing this news, another media buying executive said, “In general, that means the demand is relatively high.”

Whether the overall TV advertising market is soft or strong, the Academy Awards has its own advertising marketplace dynamics. The show does a steady stream of business year in and year out, posting regular price increases year to year.

The Oscarcast has been scoring steady ratings over the past few years except for 2003, when the Iraq war was looming. In 2001 it posted a 19.4 Nielsen Media Research household rating. The next year it earned an 18.4. The year after, 2003, saw a war-related dip to a 14.5 rating, and last year the show came back up to an 18.0.

ABC now airs the Academy Awards on Sunday instead of the traditional Monday berth, which should reap even bigger rewards for the network this season.

Said John Rash, senior VP of national broadcast for Campbell Mithun, Minneapolis: “The stunning success of `Desperate Housewives’ has made Sunday night viewing on ABC if not a habit an addiction for many of the same potential viewers of the Academy Awards,-which should help drive a bigger audience to the show.”