Today's Olympic fans and the advertisers who lust after them.
Summer 2000 is here: The sun is shining, the air conditioner's blaring, the ice cream truck's making the rounds. And yet, something's missing.
Ah, yes, the Olympics. In case you missed the memo, the first Summer Games of the new millennium were postponed until September 15, thanks to host city Sydney, Australia's equatorial position down under, where summer and winter are flip-flopped. The late start isn't the only twist that's turning media and marketing plans topsy-turvy this year. Expanded cable TV coverage, the Internet, a 15-to-18-hour time difference, and a general declining interest in televised sports will all play roles in how well NBC's coverage of this year's event will be received by viewers. With the Sydney Games just over two months away, we decided to examine the current state of Olympic fandom and the new routes and barriers that will facilitate or block marketers' ability to make an impact with consumers this year.
At press time, about 80 percent of NBC's commercial Olympic inventory had been gobbled up by long-time super sponsors such as Coca-Cola, McDonald's, and Eastman Kodak. Local cable operators also reported that spots on MSNBC and CNBC, which will broadcast long-format coverage, were at or near sellout in several markets. Still, if you look really hard - and have money to burn - there are always local sponsorships to be had and last-minute deals to be made, say media buyers.
Of course, those who can get in the Games, should. The Olympics is hands down the most popular sporting event among every demographic. That's part of its charm. The 1996 Atlanta Centennial Olympic Games were the most-watched TV sports event in history, broadcast in 214 countries and territories with a cumulative audience of 19.6 billion. In the U.S., those Games reached 87 percent of television households and about 193.5 million unduplicated viewers. Eighty-one percent of women, 78 percent of men, 72 percent of teens (12 to 17) and 78 percent of children watched some portion of the Olympics. The average viewer saw about 31 percent of NBC's 171.5 hours of coverage.
"The Olympics is the only event where you can really hit all target audiences in one shot," says Manny Rivera, director of corporate partnerships at Eastman Kodak Co. "Each of our ads are designed to send a different message about our brand and products that meet the needs of different consumers. The Olympics, like no other event, spans all our demos."
And big advertisers see big results from their involvement. Eighty-five percent of viewers say they consider Olympic sponsors to be industry leaders and 80 percent feel they have a commitment to excellence and quality, according to a study commissioned by NBC. Since Visa became a sponsor in 1986, for example, its market share has risen from 40 percent to 53 percent, and the company's preference rating as the "best overall card" has increased from 40 percent to 61 percent, according to a Visa spokesperson.
This time around, the Games will be even bigger. For the first time, NBC will cover the 17-day event on its cable channels MSNBC and CNBC in addition to the broadcast network, for a grand total of 437.5 hours of coverage. The expanded time also means more advertising inventory: Revenues are expected to far exceed the $720 million spent during the Atlanta Games, says David Peeler, CEO of Competitive Media Reporting (CMR).
But who'll be watching all this TV? While the quick and true answer is "everybody," the core Olympic audience skews upscale, female and older. In fact, 95 percent of households with incomes of $60,000 or more watched at least some part of the Summer Games in 1996, each household averaging 38 percent of all events. And unlike most televised sports, more women watch the Olympics than do men: Women comprised 47 percent of Atlanta's TV audience, compared with 34 percent of all 1995-96 network sports viewers, according to Nielsen Media Research. Olympic fans also tend to be more mature. In 1996, 82 percent of women aged 50 and older and 81 percent of men in that age group watched at least some of the Games.
When it comes to specific competitions, there are the obvious trends - women aged 18 to 24 were 32 percent more likely to watch gymnastics during the 1996 Olympics than the average viewer, while men aged 45 to 54 were 37 percent more likely to watch basketball, according to Mediamark Research, Inc. (MRI).
But what about a sport like boxing? All men, right? While about 51 percent of those who watched Olympic boxing in Atlanta were male, the sport's diehard fans were middle-aged women. In fact, women aged 45 to 54 were 79 percent more likely than the average viewer to tune in to boxing while men of that age were only 46 percent more likely, according to MRI. Interesting, especially since this year NBC decided to move boxing from the network schedule to CNBC, which has a predominantly male audience.
Newer events like mountain biking and beach volleyball, both making their second appearance in Olympic competition, give advertisers an opportunity to reach the younger demographic, who are traditionally among the lightest viewers. In fact, men aged 25 to 34 are 74 times more likely than the average TV viewer to watch professional beach volleyball on a monthly basis, according to MRI. The sport was a huge hit last time around, and there's a good chance its popularity will remain strong this year: Women athletes are now required to wear bikinis during play.
"These types of events target younger people and also outdoor people. They also offer a very picturesque opportunity, especially on the beach in Bondi (Australia)," says Eastman Kodak's Rivera. "We may want to run an ad for our waterproof sports camera during such an event, since it is designed to be used in that exact environment, at that time of day, by those kind of consumers."
But right now, most Olympic contracts don't allow advertisers to choose commercial placement by event, only by daypart, says Tom McGovern, director of sports marketing at Optimum Media Direction ( OMD), the media buying division of ad conglomerate Omnicom. However, the bigger the advertiser, the more negotiating power and flexibility they have, he says. And other industry experts say they've heard rumors that NBC may begin to sell ad time by event in future Games. NBC sales executives were unavailable for comment.
Because the Summer Olympics are traditionally played in July or August, media folk are uncertain as to how well this year's belated Games will be received. But Steven Neiman, CEO of ad shop the Neiman Group, says the timing couldn't be better. "Summer traveling is over, kids are going back to school, and viewership during that time is more dedicated," he says. "Advertisers will now also have an opportunity to buy into a period right before the launch of the new fall prime-time season. It's a great time to unveil new creative or a new product."
Brad Adgate, senior vice president, director of research for Horizon Media, isn't so sure. He expects the 10,000-mile physical distance and 15- to 18-hour time difference to lower Nielsen ratings. He predicts viewer reception will be similar to the 1988 Games in Seoul, Korea, which experienced similar obstacles. Seoul received an 11.2 overall household rating, meaning that 11.2 percent of all TV households in the U.S. watched at least some part of the Games. In comparison, Atlanta received a 14.5 rating, and the 1984 Los Angeles Olympics garnered a 17.0 point rating. Typically, says Adgate, Olympics staged on U.S. soil heighten excitement and viewership. "Having the games in Sydney will definitely hurt ratings," he says. "That's as far away as you can get from home without getting closer again."
Then there's the overall decline in all network sports viewing to contend with. The last two World Series Championships, for example, received the worst ratings ever for the fall classic - a 16.0 in 1999 and a 14.1 in 1998. Fifteen or 20 years ago, ratings were regularly in the 20- to 30-plus range. The NBA Finals and the NCAA Championships have also seen their worst ratings in the past two years, and the viewership for regular season NFL games has been decreasing steadily each year since 1986. "Overall interest in sports has been on a decline for all sports and across all demographics," says Joshua Dilworth, senior analyst of the ESPN Sports Poll, a product of Taylor Nelson Sofres Intersearch, which tracks sports fandom. "People are just less interested in general because they are overwhelmed by the number of [different] choices they now have. When people get bombarded, the tendency is to turn away and go do something else."
In fact, interest in the Sydney Olympics is down across the board compared with Atlanta, says Dilworth, with the biggest drop among 25- to 34-year-olds, who now make up just 16.3 percent of all people interested in the Games. In 1996, that age group made up 21.4 percent, the majority of those interested. Increased Internet use may be a culprit, says Dilworth.
But will time spent on the Net affect Olympic TV viewing? Marketers, many of whom will be tying their TV and online advertising together, certainly hope so. IBM, for example, has developed NBC's official Olympic Web site, www.NBColympics.com, where fans can get up-to-the-minute statistical and in-depth background information. "TV is a great medium, but our targets are business strategists and IT implementers, so Web advertising is a critical component of our ad strategy," says Joyce Lagas, spokesperson for IBM. "The Web site is a living, breathing example of what we do. It's immediate and allows us to share our message with a worldwide audience."
And with about 30.6 million Internet users logging on at work, according to Nielsen NetRatings, there's a good chance that many will log on for updates, giving online advertisers a new "in" with consumers during the day, when TV viewership is next to nil. This is the first Olympic opportunity many dot-coms have had, so expect to see them out in force as well, says CMR's Peeler.
But will the immediacy of the Internet cannibalize TV viewership? NBC will not air any live coverage this year. So now that fans can log on for results, will they bother waiting half a day for a time-delayed telecast?
Absolutely, says OMD's McGovern. When it comes to the grandeur of the Olympics, the Internet has got nothin' on television. "It's not the hardcore sports fans or stats junkies making the high TV ratings," he says. "In fact, it's almost the non-fan that makes the Olympics what it is. People watch the Olympics because it is a huge event. They watch for the pageantry and the drama, not just for the outcome."
Let the Games begin.