The network is counting on interest around several big-name returning athletes to fuel interest and ratings around the event, which kicks off Feb. 10 in Torino, Italy. The last time the network broadcast the Olympics, summer 2004 in Greece, it scored surprisingly high ratings and added $80 million to $100 million dollars of inventory. Before the 2004 games began, NBC estimated they would bring in $1 billion.
NBC: 10% shy of target
And while the network maintains its Winter Olympics sales are only 10% shy of the target, some buyers suggest completed sales are five to 10 percentage points lower than the 90% the network has indicated.
“A lot of people don’t realize the business we’ve written in the past month,” said Peter Lazarus, senior VP-sports and Olympics sales and marketing for NBC. “Not to say we wouldn’t use some inventory to help the ratings situations we’ve had across the company.”
Coming off of the Winter Olympics in Salt Lake City four years ago, it will be tough for NBC to match 2002’s ratings. Ratings tend to be higher for broadcasts of a domestic Olympics than one set internationally. But NBC is counting on stars such as figure skater Michelle Kwan, skier Bode Miller and speed skater Apolo Anton Ohno to fuel viewing. Typically, a network will hold back 5% to 10% of its inventory for make-goods in case it underdelivers.
Summer 2004 overdelivered
“Last summer the Olympics overdelivered by a ton,” said Gary Carr, senior VP-director of broadcast, TargetCast, New York. “It’s really a function of what kind of excitement it can generate and what stories they can find.”
Spot prices for the Olympics remain relatively flat from two years ago, when the cost was $650,000 to $700,000 per 30-second ad; weekend daytime spots are $250,000 and late-night and weekday spots are $75,000. With an expected ratings drop this year because of the international setting, cost-per-thousand viewers are expected to increase. Spots on cable can sell for about $10,000 a unit.
Olympics sales always start off about a third sold, thanks mostly to a base from the marketers who have committed to the event at either the International Olympic Committee or the USA Olympic Committee levels and, subsequently, invest in a major TV presence.
Eleven marketers -- Lenovo, Coca-Cola Co., Atos Origin, General Electric Co. (NBC's parent), John Hancock, Kodak, McDonald’s corp., Panasonic, Samsung, Swatch and Visa -- make up TOP, or The Olympic Partners, a group of marketers who have paid $75 million each to be the exclusive global IOC sponsors for the Torino games and the 2008 summer games in Beijing. U.S. partners and sponsors include Anheuser-Busch, Bank of America, General Motors Corp., Home Depot, Johnson & Johnson, Nike and Hilton Hotels. Then there are non-ring holders -- marketers who do large media buys around the event but aren’t an official IOC or USAOC sponsor -- including Target, Exxon, Applebees and Choice Hotels.
“They help us get to where we need to be,” Mr. Lazarus said. “There’s certainly a positive halo effect from being a media partner.”
This year, a few marketers are launching new programs around the event. Visa is backing an Olympics blog at journeytotorino.com, where Olympic athletes, coaches, fans and journalists will take turns contributing. Swatch is running the official time with its Omega brand. McDonalds is using the Olympics to kick off a global healthy living campaign starring Ronald McDonald and a host of Olympic champions, including tennis champs Venus and Serena Williams and snowboarder Crispin Lipscomb. It will debut its new packaging with nutritional information on it at the McCafe in Olympic Village. And Coca-Cola is unveiling its “Make Every Drop Count” campaign and a viewer sweepstakes with NBC titled “Drink, watch, cheer, win.”
NBC hasn’t yet announced how many hours of Olympics coverage it will air, but the network assured it will be an increase from the 375.5 hours of the last Winter Olympics on the main network, USA Networks, MSNBC, and CNBC. It will again use all of its broadcast, cable and online assets for the event.
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Kate MacArthur contributed to this story.