OIympic ad sales fall behind schedule

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Though NBC has locked up $700 million in advertising for the Sydney Summer Olympics, which begin in five months, the network is still far from clearing a profit, according to advertising executives.

Keith Turner, president of advertiser sales and marketing for NBC, said the network has sold about 80% of its goal for the Games, due to air Sept. 16 through Oct. 2. "And we still haven't even done business yet with the movie companies," he said. Nor, he added, has NBC signed on many dot-com advertisers yet.

But competing networks say NBC should be at the 90% to 95% level at this time before the event.They estimate NBC will only be able to pull in $50 million from the dot-com companies, and a lesser amount from movie marketers.

Though 80% seems like a good performance so far, ad agency executives said the tough part is only beginning. "The last 20% can be as hard as selling the first 80%," said Tim Spengler, senior VP-general manager of national broadcast for Initiative Media, Los Angeles.

Media buying executives said NBC's target was $900 million in national advertising TV sales for the Summer Olympics. The network paid $3.57 billion for five Olympics, and analysts estimate the Sydney Games' portion of the price tag at around $715 million. Add another $100 million in production costs, according to analysts, plus agency fees, and NBC's total cost for the event tops $900 million.

Previously, NBC sold some $5 million to $20 million packages for the Sydney Games -- as well as future Olympic Games -- to advertisers including General Motors Corp., which has bought all five Games that NBC acquired through 2008. Visa International, Home Depot and Anheuser-Busch have also bought multiple Olympic Games. Among those purchasing Sydney packages are Eastman Kodak Co., IBM Corp., McDonald's Corp., Nike, Samsung, Texaco and United Parcel Service

Currently, NBC is charging around $600,000 for an average 30-second prime-time spot in the broadcast, although advertisers who bought earlier have been estimated to pay up to $100,000 less. NBC is now selling $3 million packages to advertisers.

What could work in NBC's favor is a hot advertising market, which has seen increases from 20% to 25% in the scatter prices over last year's upfront. NBC, for instance, could package Sydney Olympic deals with buys on this year's upfront for entertainment programming, set to commence in late May or early June.

NBC has guaranteed a Nielsen 18.1 household rating to advertisers for its Olympics prime-time advertising buys. Four years earlier, for the Atlanta Games, the guarantee was closer to a 19 rating.


Advertisers are concerned these upcoming Games won't have the same impact as the Atlanta event because Sydney is 13 to 16 hours ahead of continental U.S. time zones. This means massive amounts of programming will be tape-delayed, which has been known to turn off viewers who can receive early results through other electronic means.

"The time difference these Games is magnified, and especially with rise of people getting early information from Internet, this could hurt them quite a bit," said one media buying executive.

On the positive side, NBC is airing the Games in late September, a month with generally higher TV viewership levels than July or August, when previous Summer Olympics have aired.

NBC will also air 172 original hours of Olympics programming, such as full soccer and basketball games, on its cable networks MSNBC and CNBC, marking the first time basic cable networks will carry original Olympics programming.

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