After paying $894m for US broadcast rights of the Olympics, NBC was forced to pay ‘digital whack-a-mole’ to get a healthy return.
The New York Times described it as an endless game of “digital whack-a-mole” and hundreds of bloggers and their readers vented fury and frustration – this was the first reaction in the US to the Beijing Olympics.
What was there not to like about the colourful opening ceremony, you might ask? Well, the problem is these people never got to see the ceremony live on TV or online.
The US broadcast rights for the summer Olympics belong exclusively to NBC, one of the big four broadcast networks.
NBC paid the princely sum of £464m ($894m) for those rights and has been keen to make a healthy return on its heavy capital investment, especially for an event that undoubtedly takes a big chunk of its financial budgeting this year.
The broadcaster, which is owned by General Electric (80% shareholder) and Vivendi (20%), said last week it had made its targeted advertising plan of £519m ($1bn), not bad business for two weeks plus of advertising.
But earning $1bn is, as you might imagine, not that easy even with one of the biggest sporting and broadcast events in the world.
The key to maximising advertising revenue was partly dependent on NBC being able to guarantee the value of the spots for advertisers. This is Advertising 101 but when there’s a 12-hour time difference and the opening ceremony of said global event opens at 8am Eastern time (5am on the West coast) on a Friday morning – a time that most people are at work – then it’s a bit more complicated.
The eighth day of the eighth month of the eighth year of the 21st century might be lucky in China, but not so much on Madison Avenue or NBC headquarters in midtown New York.
So what NBC did was to delay broadcast of the live event anywhere in the US for a full 12 hours until Friday evening.
Sure, many people had seen great pictures of the guy running through the sky and President Bush and Prime Minister Putin staring up in wonder but few actually saw any live video footage until NBC broadcast it that evening, which of course was prime-time with maximum advertising value in terms of viewer numbers.
You might wonder in the age of YouTube how such a thing is even possible but NBC did a decent job – which is the endless game of “whack-a-mole” to which the New York Times referred earlier.
NBC apparently sent out “frantic requests” to websites demanding that they remove clips and links to sites that uploaded videos from other countries. Apparently, they had to keep on top of this over the 12-hour period, taking down video after video, according to the New York Times.
I can testify that I and colleagues couldn’t find any clips on any of the usual web sources very easily during the 12-hour Olympics blackout.
NBC was also smart to enlist the enemy, by signing up YouTube to an online video partnership alongside NBC’s own extensive web coverage. This partnership probably meant that YouTube had even more incentive than usual to remove Olympic clips uploaded to its site.
It seems to have worked. NBC averaged about 34 million viewers for the opening ceremony – bigger than the live Super Bowl event in February – and the largest Olympics viewing figures for a non-US based Olympics, according to Nielsen Media Research. Athens 2004 and Sydney 2000 averaged 25.4 million and 27.3 million.
In fact, NBC said about 70 million viewers watched at least six minutes – a reach statistic advertisers use because it is presumed viewers who saw at least six minutes of a broadcast would have seen an advert as well.
“We have $1bn worth of revenue at stake here, so that means we’re not public television, for better or worse,” said Gary Zenkel, president of NBC Olympics, in a statement.
New York GiantsHowever powerful the Olympics is as an attractive advertising event, it isn’t the most expensive for US marketers. That honour still belongs to American football’s showpiece, the Super Bowl. For example, a 30-second slot at this year’s event was £1.4m ($2.7m). And the viewing figures dwarf the Olympics, too, with an average of 97.5 million Americans tuning into Fox to watch this year, and at some point 148 million tuned in (with a big city team like the New York Giants winning this year, those numbers probably got an extra bump).
But with a global event like the Olympics taking place on the other side of the world, the money is not just being made from television. The dedicated NBCOlympics.com website, which promises more than 3,500 hours of Olympics sports online with 2,200 hours live, had more than 70 million visitors on “opening night” as well. Some media watchers are predicting that by the time the Olympics takes place in London in 2012 nearly as many people will see it online as will watch it on TV.
For now, the partnership between NBC and YouTube online could see some of the more niche US sports like archery and fencing end up being watched online rather than on TV.
However, NBC didn’t take that risk with the US star of the games, swimmer Michael Phelps. According to reports, NBC made sure it juggled the schedule so that Phelps won his first gold medal in prime time – which was early morning in Beijing. Phelps, who is sponsored by Speedo, Visa, AT&T, Omega, Hilton Hotels, Rosetta Stone, Power Bar, Kellogg’s and Pure Sport, didn’t let down NBC, his sponsors or President Bush (who was there to watch). He didn’t just win but also broke an Olympic record.
Compared to the average Olympic athlete, Phelps – rather like his sporting prowess – is in a class all by himself.
Though Phelps is a tough sporting act to follow, there are plenty of other marketing opportunities at the games for US advertisers including the star-laden basketball team with familiar names like the LA Lakers’ Kobe Bryant and LeBron James of the Cleveland Cavaliers.
Nike’s advertising spot for Team USA’s basketball team has got tongues wagging as it features the late Marvin Gaye legendary performance of The Star Spangled Banner from the 1983 NBA All Star game mixed in with clips of the current team getting ready for a game.
Produced by long-time agency Wieden Kennedy Portland, some observers think Nike might have ambushed major Olympic sponsor and rival Adidas – as far as Olympics basketball is concerned.
Of course, there are plenty of lesser known athletes who will be competing for the ultimate honour and some of those are being sponsored by Bank of America’s Hometown Hopefuls programme.
As well as financial and marketing support for the athletes in sports like fencing, gymnastics and volleyball, the programme has featured an advertising campaign by BBDO that tells the story of some of the athletes. There’s also an interactive online video arm of the campaign at www.americascheer.com that allows fans to post their cheers for their favourite athletes. v