Academy Awards Advertising Cost Set To Increase As Ad Volume Reaches Record High

by Jessica Goodfellow, The Drum

Market research company Kantar Media has used its data insights to predict advertising figures for the upcoming Academy Awards based on previous events, including an increase in ad prices and revenue, rising volume of ads running, and marketers increasingly overlapping their sponsorship of big TV events.

The awards has also seen a significant amount of first-time advertisers in recent years, which is expected to increase.

The price of advertising during this years Academy Awards is expected to surpass the all-time high costs of 2015, which saw the average price of a 30-second unit exceed $1.8m, with total revenue at $110m.

The average cost of a 30-second spot in this year’s ceremony is expected to be $1.9m to $2.0m. The price increase is synonymous with advertiser demand for global events that have such wide reach and can generate strong engagement in social media.

Of the top three awards shows - the other two being the Golden Globes and Grammy Awards - the Academy Awards has the highest ad price and generates the most revenue.

As well as cost, the total advertising time is also seeing an increase. The Academy of Motion Picture Arts and Sciences (AMPAS) controls and limits the amount of commercial time in the awards broadcast, and has permitted a near 25 per cent increase in total amount of network ad time from paying sponsors over the past five years, reaching an all-time high of 29 minutes, 45 seconds in 2015 of the three to four hour long broadcast.

Along with sponsored spots, there are 5-6 minutes of promotional spots from ABC and 7-8 minutes of ads sold by local ABC stations throughout the show for a total commercial load of 42-44 minutes, or about 12 minutes per hour for a 3 ½ hour live telecast.

While its ad volume is growing, it still compares favorably with other programming - with ad time in the 2016 Super Bowl coming in at just under 15 minutes per hour, and typical range for prime time entertainment programming on broadcast and cable networks at 17-20 minutes per hour.

The top five parent company sponsors in the Academy Awards have spent $206 million in the telecast during the past five years, accounting for 46 percent of total ad revenue. This year will see two of these companies stopping involvement; with JC Penney’s deal as exclusive retail sponsor ending in 2015, replaced by Kohl’s for 2016. Hyundai was the exclusive auto sponsor from 2009-2013, replaced by General Motors in 2014. McDonald’s has appeared in the program every year since 1992 and American Express has appeared every year since 1993.

Along with long-time sponsors, the awards has seen new sponsors in recent years, with first-time advertisers Comcast, Discover Financial Services, Kings Hawaiian Bakery, Netflix, Petsmart, Sonos and Zillow accounting for 30 per cent of the ads in 2015.

Marketers are increasingly eyeing up sponsorship of all the major TV events rather than just one, with six parent companies - Comcast, Discover Financial Services, Mars, McDonalds, Softbank (owner of Sprint), and Walt Disney - sponsoring the Academy Awards, Golden Globes, Grammy Awards and Super Bowl in 2015.

The Academy not only offers TV spots, but second-screen opportunities via owned content distributed from the brand’s social media account. 2015 saw Dove, Coldwell Banker and Cadillac try out these spots to be a part of the huge social media conversation around the event, helping drive considerable amounts of social media engagement for the brands.

View the original article from The Drum

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