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March Madness for Marketers

Mar 11, 2009  •  Post A Comment

The NCAA Men’s Basketball Tournament is March Madness for marketers, too.
TNS Media Intelligence estimates that over the past 10 years, 300 advertisers have spent more than $4.2 billion on CBS’ coverage of the road to the Final Four and the ultimate college hoops championship.
“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 Dean DeBiase, CEO of TNS Media. “The tournament is a powerful property for both advertisers and CBS. Its popularity extends to a broad, diverse cross-section of the population and provides marketers with an important opportunity to connect with consumers over a three-week period via multiple platforms including TV, online, social media and in-store. It’s an ideal event for utilizing an integrated media mix and interest in the tournament this year should be high. Leveraged correctly, this is a great vehicle for traditional powerhouses and Cinderella brands alike.”
TNS notes the NCAA Tournament registered more national TV ad revenue than the playoffs for Major League Baseball, the National Basketball Association or college football. (The National Football League’s post-season, including the Super Bowl, beat out March Madness by $100 million in 2008.)
Last year, spending during the tournament reached an all-time high of $643 million, a 24% increase from the year before, with 102 marketers participating.
In 1999, 83 advertisers spent $270 million on the tourney.
John Bogusz, executive VP for sports sales and marketing at CBS, said there are still scattered TV spots available in the tournament, including a handful in the championship game, and with three weeks to go, the network is holding firm on pricing. “The market is challenging, but we’re at a decent spot,” he said.
CBS’ online March Madness on Demand is nearly sold out, with revenues up about 30% from last year to $30 million.
In the past, General Motors, AT&T and Coca-Cola have been the key advertisers during March Madness. Despite its problems, GM remains a sponsor in 2009.
In addition to GM, automakers Mercedes, Toyota, Audi and Lexus are advertising during the tournament, Mr. Bogusz said. The network also is seeing interest from movie studios and fast-food restaurants.
CBS has signed a couple of technology companies as new sponsors.
TNS says that, as GM demonstrates, marketers tend to stick with the tournament. It says that more than 80% of CBS’ revenue has come from returning advertisers.
Last year, General Motors was the top spender on the NCAA tournament, dropping $79.7 million. AT&T spent $35 million and Coke spent $25.8 million. Other marketers in the top 10 were Anheuser-Busch, Lowe’s Cos., Nike, the U.S. government, SABMiller (Miller Beer), State Farm and Daimler.
TNS estimates that last year, advertisers paid about $1.2 million for a 30-second spot in the NCAA championship game, for a household cost-per-thousand (CPM) of $93. Semi-final games cost $800,000 a spot for a $75 CPM. By comparison, a spot in the 2008 Super Bowl cost $2.7 million, for a $55 CPM.
TNS notes that GM, Coke and AT&T pay other fees as part of the NCAA’s Corporate Champions program. That program gives the companies opportunities to build marketing programs around March Madness and other NCAA sports.

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