The Oscar telecast has been a showcase advertising event for Revlon. But the company wants to reduce its inventory from 10 spots to two during ABC's March 26 broadcast, according to media executives. ABC, which has aired the event every year since 1976, has inked deals this year at $1.3 million per 30-second unit. At that rate, Revlon's package would be reduced from $13 million to $2.6 million.
Revlon is more closely identified with the Academy Awards than perhaps any other advertiser. It regularly employs the glamorous Hollywood event as the backdrop to introduce new products and creative work. "It's their Super Bowl," said one veteran marketing executive.
Executives at Revlon's in-house agency, Tarlow Advertising, New York, referred calls to Revlon executives, who were unavailable at press time.
Unlike the rotating ad roster of the Super Bowl, many Academy Awards advertisers return to the event each year because of its consistently high ratings, leaving few opportunities for new advertisers to buy time. In addition to Revlon, other perennial Oscars advertisers include AT&T Corp., American Express Co., General Motors Corp., McDonald's Corp., Merrill Lynch & Co. and Pepsi-Cola Co.
The Academy Awards typically is the second-highest-rated regularly scheduled program of the year. Last year the show earned a 28.6 Nielsen rating and 46 share, down from 1998's 34.9/55.
ABC executives won't discuss the move by Revlon or say which companies have expressed interest in purchasing the valuable inventory. Revlon can't formally drop the time until ABC resells it, but the network is expected to have no problem attracting other buyers. Revlon's move may open the door for more dot-coms to gain an Oscar presence, and indeed iVillage is said to be on the waiting list.
NO PROMO PLANS
Revlon typically supports its media buy with off-air promotions and sweepstakes. But the company has yet to announce any Academy Awards-related promotion plans.
Revlon has had a tough financial ride of late. On Feb. 19, the company posted dismal fourth-quarter results, although executives vowed a return to profitability in 2000. Fourth-quarter net sales were down 48.3% to $199.1 million, and 1999 sales dropped 17.4% to $1.86 billion. The company attributed the decline to delays in new-product launches and efforts to reduce retailers' excess inventories as part of a restructuring.
Revlon has been battling weak financial results since 1998 and has tried several strategies to reduce more than $1 billion in debt related to its 1985 leveraged buyout by financier Ronald Perelman. The company began a cost-cutting program in 1998 and explored several asset sales in 1999. In October, it announced it would sell its Revlon Professional Products division and several Latin American brands.
Analysts are taking a wait-and-see attitude on the marketer's success. "Although we are pleased with the progress on the asset sales, we recognize Revlon still has over $1 billion in debt and is suffering from continued declining market shares in most of the categories in which it competes," Salomon Smith Barney's Wendy Nicholson recently wrote.