When it comes to Oscars, advertisers skip spotlight

Thu Feb 19, 2009 3:39pm EST
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By Paul Thomasch

NEW YORK (Reuters) - The Oscars have lost some of their luster this year -- at least when it comes to advertising.

ABC has dropped prices for 30-second advertisements and scrambled to replace two of the key sponsors for its Sunday broadcast of the Academy Awards, when Hollywood pays tribute to the best actors, directors, producers and movies of the year.

While always one of the biggest TV events, drawing over 30 million U.S. viewers, the Oscars broadcast this year is feeling the sting of the sharp pullback in ad spending by auto and retail companies.

Prices for advertising spots averaged $1.7 million last year, but this year, prices have come down to anywhere from $1.4 million to $1.7 million, according to media sources.

In addition, General Motors and L'Oreal, two of the biggest advertisers in the past, have decided against running spots. GM alone had spent $105 million over the past decade on Oscar ads, according to TNS Media Intelligence.

Hyundai Motor, which also bought time in this year's Super Bowl, will step in as an advertiser. Other companies that have bought spots include J.C. Penney, PepsiCo's Frito-Lay, and Coca-Cola.

But Walt Disney's ABC also decided it should cast more widely for advertisers, and in a departure from tradition, will let movie studios buy commercials for the first time.

The Oscars broadcast is hardly alone in feeling the pinch of the advertising downturn. Spending has dried up across media, and experts say overall U.S. ad expenditures will drop by around 5 percent this year.   Continued...

<p>A section of red carpet is rolled out in the arrivals area in front of the Kodak Theatre as preparations continue for the 81st Academy Awards in Hollywood, California February 18, 2009. REUTERS/Danny Moloshok</p>