With the economy in shambles last year, CBS and NBC faced long odds in their respective quests to turn the 2010 Super Bowl and Winter Olympics into profit-making ventures.
Now a sudden surge in the television advertising market is offering both networks hope for an upset.
CBS officials announced earlier this week that they were sold out of spots for Sunday’s Super Bowl matching the Indianapolis Colts and the New Orleans Saints, and prices for some 30-second spots had reached the $3 million-per-unit level that NBC was charging back in the pre-financial-crises run-up to 2009’s big game.
Meanwhile, General Electric CEO and chairman Jeffrey Immelt told investors a few months back that he expected NBC to lose “a couple hundred million bucks” on Winter Games coverage that totaled $820 million in rights fees alone.
But with a recent pick-up in Madison Avenue’s “scatter market” — in which TV advertising can be purchased á là carte and close to the date of broadcast — NBC looks to be closing that chasm fast.
The chances of NBC actually winning Olympic gold itself — or rather, going into the black — still seem nil, but the outlook is a whole lot better than it in the run-up last year, when key advertisers like Anheuser-Busch significantly trimmed their Winter Games budgets.
As of late November, NBC had sold out less than 70 percent of its Olympics commercial time. Four years earlier, in the run-up to the Turin Games, the network was at roughly 85 percent at the same point.
But in mid-January, network officials announced that they had reached the 92 percent point of their revised goal of selling $650 million worth of spots.
And according to one TV buyer for a major media agency who has negotiated numerous deals with NBC for Vancouver Olympics commercial time, as the Games get closer, it gets even better for the network.
“They’re in better shape than they were just a few weeks ago,” he told TheWrap. “We’re dealing with a pretty resurgent market right now.”
With 825 hours of Olympics coverage spread across broadcast, cable and digital assets, the buyer said NBC is now actually turning down offers for spots on the flagship broadcast network.
“You can go in and buy inventory on cable, and it won’t be a problem,” he said, “but if you’re looking to secure anything in the premium primetime positions, there isn’t much left.”
He added that there was fear among advertisers who’d already ponied up for the Games that NBC would use unsold Olympics time to make good on under-delivery from their primetime schedule this season. That obviously would have have triggered buyer’s remorse for advertisers who’d paid full price for a Games audience.
“Fortunately, I don’t think we’re going to see that at all,” he said.
NBC’s recent comeback, buyers say, bodes well for the entire TV industry, which saw its advertising dollars crater last year. In fact, at last year’s upfronts, when advertisers buy the bulk of commercial time for the upcoming TV season, the Big 5 networks walked away with about 15 percent less money than they did in 2008.
“I think it’s 100 percent relatable to an improving economy,” said another media agency executive. “There was a lot of concern about domestic automakers dropping out (of the advertising market), but they seem to have been easily replaced by foreign autos. And the movie-studio business — at least theatrically — is healthy. We’re seeing technology coming back to some degree. And the telecom business is still in a marketing war where a lot of money is being spent.”
Of course, much like the broader economic recovery, the business of television advertising is still a long way away from actual growth.
For their part, CBS sales officials have had to get creative to move their Super Bowl time. Facing the loss of traditional advertisers like Pepsi, the network has opened its inventory up to some non-traditional sponsorship.
In the last week alone, the network made headlines by accepting a controversial 30-second spot from a Christian advocacy organization that criticizes abortion, but rejecting an ad from a gay dating site.
The network also said yes to a purchase from Time Warner cable network TruTV, which wanted to run a promo for its new series “NFL: Full Contact.” In the past, such an overture from a media rival for such a high-profile spot would have been rejected.
But opening the market up has allowed CBS to actually be ahead of NBC’s sales pace from a year ago.
“We’re happy campers right now, CBS sales president Jo Ann Ross told Reuters earlier in the week.