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NBC claims it will meet its revenue goal of $900 million for upcoming Winter Olympics, in spite of some inherent challenges: the Games come only five days after the Super Bowl, they’re being sold by a network that is struggling in prime time, and they’re competing against the American Idol phenomenon. So how is the network managing to maintain its asking price of $500,000 to $700,000 per spot? According to AdAge, it’s because advertisers that buy into this winter’s Games are being given a window of a few months during which they can negotiate a level of exclusivity - dependent upon the level of their Turin commitments - in the Beijing Games of 2008.
NBC’s goal of $900,000 million is up 22 percent from the Winter Olympics in 2002. Because the 2002 Olympics took place domestically, ratings were likely higher than this winter’s Games will pull.
However, America loves a story, and the upcoming games have a few to follow, which may convince more viewers to watch than expected. Slalom skier Bode Miller admitted to CBS’s 60 Minutes that he had skied drunk (though he later recanted, claiming he was only hungover), and figure skater Michelle Kwan returns for her third Olympics, hoping to win the gold that remained out of reach in the past.
NBC may also have been helped in reaching its goal by advertisers who decided to avoid this year’s Super Bowl. Industry insiders believed the high level of scrutiny on Super Bowl ads, along with the rich price tag and the availability of the Olympics following just days later, caused some advertisers to skip the Super Bowl altogether and spend their budget on the Olympics, instead.
For other networks, the Olympics can depress pricing. This year, the cable market is being hit especially hard, the article points out.
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