As NBC’s ratings-challenged Olympics coverage enters the home stretch, the network will likely manage to avert a post-Rio ad makegoods crisis despite under-delivering ratings guarantees by between 10%-15%, according to media buyers surveyed by B&C.
“Right now they are pretty close to our guarantee targets, despite the ratings shortfalls,” says one sports media buyer. The buyer, who, like others, declined to be identified due to the sensitivity of dealings with the network, detailed how NBC from the outset had a plan to properly compensate clients with makegoods during the Games.
“NBC gave many advertisers extra ad units heading into the games with the understanding that if guarantees were met, the advertisers would pay back for the units if there was an over-delivery,” the buyer said. “Since there has been under-delivery, those extra units covered a portion of it and the network has also been providing additional makegoods as the Games have proceeded.”
Another buyer says, “NBC has done a job for our clients giving bonus inventory at the start of the Games. They are tracking things daily and trying to find ways to get advertisers as close as possible to their guarantees.”
Because of the record amount of coverage—nearly 7,000 hours, planned across the company's many networks over 17 days—NBC went out of its way from the start to assure it would not anger advertisers. Special care was taken to try to keep them whole based on their ad buy ratings guarantees.
“This is a huge event for the network and it wants to do everything possible to keep its advertisers happy,” one buyer says.
Buyers say most of the ratings guarantees were made based on household viewership, not demos, even though the 18-49 demo is where NBC is having its best ratings success. The network announced Thursday that its primetime Olympic ratings in the 18-49 demo have been the most dominant in Olympic television history. Its 13-night 7.7 primetime demo rating was 353% higher than the other broadcast networks combined.
However, most of the ad deals were done offering household ratings guarantees of about an 18.0 and through 12 nights NBC primetime had delivered only a around a 16.0.
Most of the Olympic deals were for packages that also included cable and digital platforms, but buyers say the bulk of the dollars most advertisers spent went to primetime and that was also the most costly to buy, averaging about $1 million per 30 second spot. Some clients paid as high as $1.2 million per unit and others paid less than $1 million on average, depending on the amount of inventory they purchased.
While there has been a ratings fall off following the end of the gymnastics and swimming competition, with the weekend here, ratings shortfalls on Friday and Saturday night should be picked up by solid ratings Sunday night for the closing ceremonies. So ratings shortfalls should not be increased by much more than the percentage declines they are currently averaging.
According to buyers, NBC has been concentrating on making the Olympic sponsors and its other major advertising whole first as far as offering makegoods, and then handing them out to other clients. While most are close to being at their guarantee targets, there will be some marketers who will still need to get makegoods following the Games.
Buyers say they will most likely be given a choice depending on their audience targets. For advertisers who targeting a sports audience, they will most likely be given units in NBC’s Thursday night or Sunday night football telecasts. For more general audience advertisers, makegoods could be offered for shows with large but more general audiences like The Voice.
NBC has noted that one reason NBC primetime ratings are down compared to the London Olympic coverage in 2012 is that in London there was no competing primetime cable coverage of the Games like there is this year. There was also no simultaneous streaming coverage from London.
Buyers are understanding about that. “Today buying advertising in the Olympics is more than just buying linear TV,” says one buyer. “Linear TV is easiest to measure but there is also value in NBC’s digital platforms and streaming coverage.”
And despite the lower linear TV ratings than during the London Games and the failure to meet initial guarantees, media buyers are praising NBC for how it has carried out its plan to keep advertisers as close to guarantees as possible with it providing of additional units at the start of the games and its rolling makegoods throughout.
“I don’t think NBC is going to be in a situation like ESPN got itself into during the College Football Playoff coverage,” one buyer says. Because of ratings under-delivery of 36% for the two national championship semi-final games that aired on New Year’s Eve, the network was on the hook for more than $20 million in makegoods. The national championship game also under-delivered by close to 20%. This angered many advertisers and some waited six months to get makegoods in a comparable large sports event—ABC’s telecast of the NBA finals in June.
NBC has also been criticized in some media reports for airing so many promotional spots for its own shows during the Games. According to iSpot.tv data, NBC and its cable networks during the first 12 days of the Games aired more than 3,000 promotional spots for TV shows on the NBCU networks.
One buyer, however, defends NBC for the tactic. “The Olympics draw as mass audience so it is smart for the network to promote its other shows there,” the buyer says, adding that NBC entertainment programming advertisers in those shows can be helped if those promotions draw more viewers to them. Plus, he adds, “NBC is pouring so much money into televising the Olympics, you can’t fault the network for running all those promotions.”