NBC exec: 'Negative stories good for ad sales'
Negative stories in the run-up to an Olympics are nothing new. We saw them in Beijing in relation to human rights abuses in China, and in Sochi, regarding the city’s readiness to host the Games.
However, with the Rio Games, we seem to have reached a new level of negativity with Zika, protests, security concerns, and questions over not just the readiness of venues and athlete accommodations, but of the city’s very infrastructure. You’re probably thinking, this kind of negative press can’t be good for anybody.
Apparently, that’s not entirely true. Someone is in fact benefiting from the negative reports that have impacted ticket sales and led to many of the world’s top athletes dropping out of the Games altogether. Who you ask?
A television network.
That’s right, NBC. The old “Proud Peacock.” According to network executives, all these negative stories about Zika, social unrest and sewage-infested waters have raised awareness about the Games, and this has in turn helped to boost the network’s ad sales.
“The stories on the issues have really helped us, we believe,” said Seth Winters, head of advertising for NBC Sports, speaking on a conference call to reporters.
Advertisers for the Rio Olympics include many of the usual suspects with automotive, beverage, telecommunication, insurance and entertainment companies all buying ad time during the Games. Being an election year, Winters also indicated that at least one political campaign had bought airtime, although he declined to specify which one.
NBC has already sold $1.2 billion in national advertising, a figure that encompasses broadcast, cable and digital advertising. Considering the network paid $1.2 billion for the broadcast rights to the Rio Olympics, it has already broken even on that regard.
The network is also going further with its coverage of this year’s Games with 2,084 hours of coverage planned across 11 networks, and 260.5 hours slated for NBC alone. More coverage equals more advertising, which means more money for the network, Zika mosquitoes be damned.
About 75 percent of the advertising revenue NBC generates will come from ads aired during prime time on NBC, with Winters stating the network is already sold out of “premium inventory.”
“We’ve surpassed what we thought was at one point an unobtainable threshold,” said Winters.
Having hit its internal targets for ad sales well in advance, NBC is holding on to additional ad inventory until the games are underway.
So while ticket sales are floundering and people in Brazil are scratching their heads and wondering what’s in it for them, it’s a boom-time for the network. In fact, NBC expects the Rio Olympics to be the most profitable in history.
NBC’s broadcast will also benefit from the time difference in Rio, which is only one hour ahead of the East Coast. This means that most events will be televised live during prime time, further ratcheting up the network’s take from advertising dollars.
The great 19th-century showman and circus owner P.T. Barnum used to say “there’s no such thing as bad publicity.”
It looks like in the case of the Rio Olympics, Mr. Barnum was right.
