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Skipping the Olympics is not an option for many advertisers

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The Olympics have long been a near-ideal forum for businesses looking to promote themselves, with plenty of opportunities for brands to incorporate ads into the pageantry and feel-good stories of athletes overcoming adversity – all for less than the price of a Super Bowl – Commercials.

But now with around 11,000 competitors from more than 200 countries gathering in Tokyo as the coronavirus pandemic continues, Olympic advertisers are concerned about the more than $ 1 billion it will spend on serving ads on NBC and its streaming Platform Peacock have issued.

Calls to cancel the more than $ 15.4 billion spectacle have intensified as more athletes tested positive for Covid-19. The event is also deeply unpopular with Japanese citizens and many health professionals who fear a superspreader event. And there will be no spectators in the stands.

“The Olympics are already damaged goods,” said Jules Boykoff, former Olympic soccer player and sports policy expert at Pacific University. “If this situation goes south quickly in Japan, we could see some changes in the way deals are made and the willingness of multinationals to get involved.”

Panasonic, a top sponsor, is not going to send its CEO to the opening ceremony, which is scheduled for Friday. Neither will Toyota, one of Japan’s most influential companies that also dealt a blow to the Games on Monday, when it said it abandoned plans to run Olympic-themed television commercials in Japan.

In the United States, marketing plans tend to move forward.

For NBCUniversal, which paid billions of dollars for the exclusive rights to broadcast the Olympics in the United States through 2032, the event is a crucial source of income. There are more than 140 sponsors for NBC’s coverage on television, on its annual streaming platform Peacock and online, an increase from the 100 that signed up for the 2016 Summer Games in Rio de Janeiro.

“For some of our blue-chip advertisers, not being there with an audience of this size and scale is not an option,” said Jeremy Carey, executive director of sports marketing agency Optimum Sports.

Sprint star Usain Bolt Jogger points to a bar in a Michelob Ultra commercial. Procter & Gamble’s campaign highlights good deeds of athletes and their parents. Sue Bird, a basketball star, advertises fitness equipment maker Tonal in a spot that debuts Friday.

Chris Brandt, Chipotle’s chief marketing officer, said the situation was “not ideal,” but the company still plans to run a campaign with profiles of Olympic athletes.

“We believe that people will continue to tune in even without fans, as they have done in all other sports,” said Brandt. “It will be a diminishing factor in the excitement, but we also hope the Olympics will form a bit of a unity at a time when the country seems so divided every day.”

NBCUniversal said it had exceeded its $ 1.2 billion U.S. advertising revenue for the 2016 Rio Games and sold all of its ad space for Friday’s opening ceremony. Buyers estimate that a 30-second prime-time commercial will cost in excess of $ 1 million.

Television has drawn the bulk of ad spend, but the amount generated by digital and streaming ads is increasing, according to Kantar. Multiple predictions predict that TV ratings for the Olympics will lag behind the Rio and London games, while streaming audiences will grow sharply.

Business & Economy

Updated

9/21/2021, 5:48 p.m. ET

NBCUniversal said Peacock had received $ 500 million in pledges for the coming year during so-called preliminary negotiations earlier this year when ad buyers reserved seats with media companies.

“You won’t find a single old media company that doesn’t advance its streaming capabilities for its biggest events,” said Mr. Carey, CEO of Optimum Sports. “This is the future this business is going into.”

United Airlines, a sponsor of Team USA, has suspended its original advertising campaign promoting flights from the United States to Tokyo. His new initiative with gymnast Simon Biles and surfer Kolohe Andino promotes a broader return to air travel.

“There was little point in focusing on a specific destination that Americans may not be able to travel to,” said Maggie Schmerin, the airline’s executive director of advertising and social media.

United’s campaign will appear in airports, on social media and on streaming platforms including Peacock, but not on television. Ms. Schmerin said the airline wanted to “vote customers where they are based on their viewing habits”.

Advertising agency executives said companies could regularly check for updates on the Covid outbreak in Japan and adjust their marketing messages accordingly.

“Everyone is a little careful,” says David Droga, founder of the Droga5 advertising agency, which worked on an Olympic campaign for Facebook that featured skateboarders. “People are pretty fragile right now. Advertisers don’t want to be too sweet or too clever, they want to try to find the right tone. “

Many companies that advertise during the Games are running campaigns that they had to redesign from the ground up after the Olympics were postponed last year.

“We planned it twice,” said Optimum Sports’ Mr. Carey. “Think how much the world has changed in that one year, and think about how much each of our brands has changed what they want to say, do, or sponsor out there. So we crumpled it up and started over. “

Visa, a sponsor, will not hold promotional events, customer meetings in Tokyo and will not send executives, said Lynne Biggar, the company’s global chief marketing officer. The company’s commercial during the broadcast of the opening ceremony begins with a soccer game before showing how Visa is used in transactions around the world.

NBCUniversal’s sports calendar also includes the Super Bowl in February, for which 85 percent of advertising space has already been sold or is under discussion, the company said. Also on the program: the soccer World Cup in Qatar at the end of 2022 and the Olympic Winter Games in Beijing in February, which put the advertising industry in a difficult position due to the poor human rights record in China and Qatar.

For now, however, the advertising managers just want the Tokyo games to run smoothly.

“We’ve been looking at these Covid updates every day since last March,” said Kevin Collins, a senior executive at advertising buying and media intelligence company Magna. “I’m looking forward to you starting.”

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