NEW YORK (Mediaweek) - With fewer than 90 days left before the Winter Olympics launch in Vancouver, NBC Universal still has a solid chunk of commercial spots left to sell.
And while the ad marketplace has begun showing signs of life in the past few weeks, the company faces an uphill climb if it is to hit its volume target.
According to media agency estimates, NBC Universal must still move 30%-35% of its inventory if things are to be wrapped by the time the first athlete points his skis down the jump at Whistler Olympic Park.
That NBC is pacing behind precedent isn’t exactly an unexpected development, given the recession. In late November 2006, the network was about 85% sold out for the Torino Winter Olympics, well on its way to setting a record haul of $930 million. That year saw the U.S. economy grow 2.7%.
Four years ago, sponsors of NBC’s Winter Olympics telecast paid $500,000-$700,000 per 20-second spot, and an ad in the 2010 Games could fetch as much as $800,000. That said, media buyers suggested that NBC is now much more flexible on pricing.
“NBC will be on a price roller coaster until they firm things up,” said Larry Novenstern, executive vp and director of electronic media for Optimedia. “There may be some good opportunities between now and then, and at this point, they’re willing to listen to anything. At the same time, there’s a point beyond which they’re going to say, ‘We’re not bending.'”
NBC execs declined comment.
One television exec said that NBC had become increasingly active in the past few weeks.
“Speaking to general market conditions, auto’s coming back thanks to GM and Chrysler. Telco money’s there because AT&T and Verizon are duking it out,” the exec said. “I can’t say whether this is going to hold up, but right now, if you’re a major advertiser looking for big-time exposure in Q1, the Olympics is a hell of a buy.”
NBC’s flexibility on pricing is a necessary byproduct of lesser commitments from the likes of Anheuser-Busch, which has cut its Olympics spend in half. Given the increased emphasis on baby faces like snowboarder Shaun White, speed skater Shani Davis and skier Lindsey Vonn, the network is in a position to land more youth-targeted sponsors.
While ratings guarantees for the Winter Games are hashed out on a client-by-client basis, most observers believe NBC shouldn’t have to worry about not hitting deliveries.
“They’re not going to have any trouble drawing an audience,” said a rival network head. “But if I‘m them, I‘m (worried) about where the market’s heading. If the holidays are a disaster and the market goes back into the (toilet), they could be off as much as $300 million.”