Television
Ad-wise, the Oscars in this digital age
By Diego Vasquez
Feb 12, 2009 - 1:10:30 AM

Like everything else these days, the Academy Awards are being hurt by the struggling economy. The red carpet is expected to be more subdued, with less-glitzy outfits and fewer high-priced baubles accessorizing starlets’ gowns. Longtime advertiser General Motors, which has sponsored the show since at least 1992, dropped out due to massive cuts in its marketing budget, while ABC lowered the price for ads from a reported $1.69 million per spot last year to $1.4 million. That’s according to a TNS Media Intelligence report out yesterday analyzing the annual awards ceremony. TNS also notes that for the first time the Academy will allow movie advertisements during the show, though it has placed heavy restrictions on who is allowed to buy them. Still, the down economy could lead to one positive for ABC. Viewership for the Feb. 22 ceremony may be up from last year’s record low as people look for escapist entertainment on television. Jon Swallen, senior vice president of research for TNS Media Intelligence, talks to Media Life about why the Oscars are still an attractive ad buy, the financial impact of lower ad prices, and why calling the event the Super Bowl for women is misleading.

 
Why are the Oscars still an attractive buy for advertisers?
 
Three reasons. The first is audience size. Second, it’s a desirable demographic target of upscale urban women. And third, sponsorship opportunities extend beyond the TV broadcast, becoming part of a broader marketing program.
 

What's the biggest misconception about the Oscars as an ad vehicle?
 
That it’s still "the Super Bowl for women." The female ratings for the Oscars have been in long-term decline. And the gap in female audience between the Super Bowl and Academy Awards is becoming more substantial.
 
The Oscars is still targeted towards women, and the advertising reflects that, but the audience size differential is significant and makes it hard to support the claim that the Oscars are still the Super Bowl for women.
 

How have digital media helped augment Oscar advertising after the ceremony in recent years?
 
Digital media have stretched out the Oscars on both sides of the actual awards ceremony. And they’ve created an additional ad revenue stream as a result.
 
The Oscars are now a two- to three-week event rather than a three-hour event. And a wide variety of web sites and other digital media have found that there’s a market for Oscar-related content in the weeks leading up to the awards, and in the 48 to 72 hours after the awards.
 
With things like Oscar previews, fan voting on who will win, those kinds of things are prevalent in the lead-up, and in the two to three days after it’s blogs about celebrities, where the parties were, red carpet photos and other video footage.

All of these extend the Oscars and make it a more stretched-out event.
 

Compared to the Super Bowl, how much buzz do Oscar ads usually generate?
 
I think it’s a very small fraction, and that’s not a comment on the Oscars, it’s a comment on the Super Bowl, which is unique in its standing as an advertising showcase.
 
In the Super Bowl, the ads share co-star status with the football teams. But at the Oscars, the ads are not the star. The celebrities are the stars.
 

How much will the current weak economy cut into ad revenue for ABC for the event?
 
The indications are that ABC has reduced its asking price. For the past couple years, ads have sold for around $1.65 million for a 30-second spot. And the indications are this year it’s in the neighborhood of $1.4 million, or possibly lower.

And that reflects both the high out-of-pocket costs overlaid on a weak advertising marketplace, and advertisers and companies feeling the need to cut back on marketing investments.
 
So I think the potential impact to ABC is a reduction in ad revenue from the $80 million level, where it’s been at the past three years, to in the neighborhood of $66 to $68 million, or roughly a 15 percent decline.
 

This year there's a big shift with General Motors cutting out its sponsorship after years of participation. Generally speaking, why is there so little turnover among Oscars sponsors?
 
One of the biggest reasons is the fact that there’s less ad inventory to sell in the Oscars as compared to the Super Bowl or other mega-events. As a result, the value of that inventory to a potential sponsor is increased because of the scarcity.
 
Plus, when you combine that with the opportunity for category exclusivity, it encourages incumbent advertisers to renew their sponsorships and it keeps their competitors out.
 

Why is the Academy allowing movie advertising this year and what impact will that have?
 
I think the decision to permit movie advertising is an acknowledgement that the program could use a little more fun, a little more creativity, and a little more excitement. And movie trailer ads, in a program that’s about the celebration of movies, plays well to that theme.
 
But on the other hand, the restrictions that the Academy has placed on movie advertisers mean that comparatively few films will be able to run spots in the show. I would expect, based on those restrictions, perhaps as many as four movie studios might run ads during the Oscars. By comparison, the Super Bowl featured ads for nine different movies.
 
So I think the movie category will certainly help ABC, but it’s not going to be their salvation.
 

How does ad clutter in the Oscars compare to other major telecasts?
 
Clutter in the Oscars is significantly less, and that’s due to restrictions the Academy places on ABC as part of their licensing arrangement.
 
The Oscars typically average roughly nine minutes of network advertising per hour. By comparison, the Super Bowl is typically around 12 to 13 minutes per hour. And a regular primetime TV program is around 14 and as high as 15 minutes per hour.
 
So if it seems like there are fewer commercial breaks during the Oscars, it’s because there really are.
 

Do you expect any major up or down shift in ratings this year?
 
Well, considering that last year’s ratings were so abysmal, I suppose there’s nowhere to go but up.
 
But, in fact, the ratings are tied to factors like the level of interest and awareness in nominees for major awards, and the box office appeal of those nominees. Ratings are also tied to the popularity of the host or hostess.
 
Neither of those is a particularly favorable sign for the 2009 Oscars. On the other hand, the Oscars are also the epitome of escapist entertainment, and in the current mood or climate, there are worse ways to spend three hours than in the fantasy land of Hollywood.
 
All in all, I think the ratings for this year’s show will be 5 to 7 percent higher than last year.