Olympic Ratings Plunge and Star Athlete Stumbles Heat Up NBC’s Make-Good Talks With Advertisers

NBCUniversal hopes its broadcast of the Tokyo Olympics gives American viewers a grand sports spectacle they can watch at any time they like. Advertisers, however, have begun to wring their hands as more people watch the Games at moments of their own choosing.

Traditional TV viewing for the Summer Games has declined noticeably, and, a decision by popular gymnast Simone Biles to take herself out of the team competition early Tuesday has spurred advertiser anxiety, according to executives familiar with negotiations between NBC and sponsors. Not helping matters: Her exit came within hours of tennis star Naomi Osaka’s ouster from the tennis medal competition.

While NBC’s Olympics are beating competitors’ programs each night, early ratings for NBCU’s TV broadcasts are “clearly are not what NBC, our agency or our clients were looking for,” said one media buying executive. This buyer cited a lack of must-follow athlete storylines early in the competition; early-morning availability of coverage via streaming; and the absence of live fans at the Games due to the coronavirus pandemic as factors in a downturn of viewing. This executive said early viewership trends were “disappointing.”

Viewership for Friday night’s opening ceremonies came to around 17 million viewers, according to Nielsen , marking a decline of approximately 36% from the audience for the company’s 2016 broadcast of an opening ceremony for the Summer Games in Rio. Viewership has improved for each primetime broadcast following, but the size of the declines from the previous Rio Olympics have unnerved advertisers, who are believed to have invested more than $1.2 billion in the sports extravaganza.

Little surprise, then, that NBCU and several media agencies have entered into discussions for “make goods,” or ad inventory that is given to sponsors when a program fails to meet its original viewership guarantees. Ad buyers have pressed NBCU to give clients unsold Olympics inventory, noting that few other regular-season TV events will draw the consumer impressions that the Olympics do. One person familiar with NBCU said the company believes it has built in a sufficient amount of make-goods in its modeling of Olympics sales to ensure advertisers get the impressions they were promised.

The Olympics discussion between advertisers and NBCU is not a new one. As more viewers migrate to streaming, linear audiences have declined steadily for traditional TV events that range from a broadcast of an original episode of “This Is Us” or “Young Sheldon” to the annual telecast of the Oscars or the Super Bowl. NBCU typically holds commercial inventory in reserve to accommodate ratings shortfalls, and advertisers, depending on the amount of money they have spent and the terms of their deal, press for the best ad time they can get.  In 2016,  NBCU was able to meet advertiser guarantees by granting sponsors extra commercial time, and came away from Rio with approximately $250 million in profit.

There are reasons for some advertisers to cheer. Streaming activity across NBCU’s digital venues has been on the rise. Through Sunday, viewers have streamed 735 million total minutes of Tokyo Olympics content — up 24% from the comparable time period for the 2016 Rio Olympics and 41% compared with the 2018 PyeongChang Winter Games.

Executives at NBCUniversal have counseled advertisers to take a longer-term view, noting that there are many more nights of Games ahead that could see the emergence of star athlete performances. They are also pointing to results that require more time to gain.

Rather than tout how many people saw the ads that accompany the Olympics, NBCU is playing up the connection the commercials make to those who do, issuing stats on Monday that look less at mass reach and more at the amount of attention and recall Olympic commercials spark from the audience. Commercials that run elsewhere, says the executive familiar with NBCU, can’t generate similar results.

Until the Olympic telecasts gain firmer traction, however, NBCU is likely to keep hearing from sponsors.

 

 

optional screen reader

Read More About:

Source: Read Full Article