As Olympics Ratings Defy Expectations, NBC Frees Up Rainy-Day Ad Inventory
Ratings for NBC's presentation of the 2018 Winter Olympics have been higher than the network had anticipated when it began negotiating with advertisers looking to buy time in the 18-night spectacle, and as such the ad sales team has some bonus available inventory on its hands.
Speaking to reporters in a Tuesday afternoon conference call, NBC Broadcasting & Sports Chairman Mark Lazarus said the Olympics ratings "increased our capacity in ways we did not expect." As a result, NBC is freeing up some of the commercial time it had held back as a hedge against possible makegoods.
"We are on a pace right now where the inventory we held aside for potential under-delivery of our estimates is not going to be needed," Lazarus said, adding that NBC has "a few million dollars" worth of inventory it had salted aside for makegoods that it can now sell to "advertisers who came in with smaller buys and who want to buy up" or, perhaps, newcomers who approached the PyeongChang Games with a wait-and-see attitude.
"We still have the ability to go back into the market and sell more," Lazarus said. "If you want to sell your product in the next two weeks, we are the window to consumers."
Through the first five nights of primetime Olympics coverage, a span that includes the broadcast of Friday's tape-delayed opening ceremony, NBC Sports is averaging 23.6 million viewers via the NBC and NBCSN TV networks and across its digital platforms. That marks a slight 6 percent decline compared to the 25.1 million viewers NBC averaged during the first five nights of its 2014 Winter Olympics coverage.
Media buyers who bought time against NBC's Total Audience Delivery metric, which is ad sales argot for the aforementioned broadcast/cable/digital bundle, confirmed that the network's current numbers are landing right in the sweet spot of its guarantees. Those who bought inventory before NBC embraced the TAD currency say the Olympics are coming in slightly shy of the negotiated household rating, although the shortfall is not considerable. According to Nielsen live-plus-same-day data, the broadcast-only opening ceremony and the first four nights of primetime competition on NBC and NBCSN averaged a 12.9 household rating, down just a few ticks from the guaranteed 13.5 rating.
But the expectations of those who bought into the complete TAD package far outweigh that of the early birds who negotiated against guaranteed household ratings. Lazarus said nearly 90 percent of the Olympics advertisers "bought the entire suite of products."
While TAD is designed to account for every viewer who takes in the Olympics, regardless of platform or medium, to the casual observer the particularities of NBC's deals with advertisers may be somewhat confusing. For example, even though NBC and NBCSN air completely different content during the primetime window—on a night the broadcast network is airing downhill skiing and snowboarding, its cable counterpart may feature figure skating or hockey—the ratings for the two channels are measured as if they originated from one source. But because NBC and NBCSN carry the same commercial load during the primetime Olympics window, no distinction is made between the two telecasts.
(Bully for you if you're starting to catch on to the idea that the commercials are actually more relevant than the actual programming. As far as Nielsen is concerned, ad loads define a program in ways the log lines in your copy of TV Guide simply do not.)
It is perhaps also worth noting that while the current Nielsen data does not reflect out-of-home viewership in bars, restaurants, gyms and other public venues, those bonus deliveries aren't entirely relevant with regards to NBC's deals with Olympics advertisers. As an NBC spokesperson told AdAge on the eve of the PyeongChang Games, because the network didn't sign off on Nielsen's out-of-home service until long after it had begun selling its Olympics inventory, the OOH metric "factored into only a small number of agreements."
Back in PyeongChang, Lazarus today acknowledged a recent report by the Wall Street Journal's Alex Bruell that examined how big spenders such as Procter & Gamble, AT&T and General Motors had cut back on their investment in this year's Olympics.
"There's been some things written about sponsors who aren't spending as much, and that's unfortunate for them because [our advertisers] are reaping the great benefits of these huge American audiences that are assembling," Lazarus said. "Our advertisers are already letting us know that they're seeing results and they're feeling very positive about their investment in the Olympics."
Lazarus went on to say that new advertisers have more than made up for those veteran Olympics backers that have tightened the purse strings, noting that newcomers have been responsible for snapping up as much as 60 percent of NBC's available inventory.
NBC has said that it will have booked north of $900 million in ad sales revenue by the time the Olympic torch is extinguished during the closing ceremony on Feb. 25.