March Madness TV Ads Have Generated $8.2 Billion In Revenue Since 2006
Second only to NFL Playoffs as Most Lucrative Post-Season Playoff Franchise
New York, NY, March 14, 2016 – Kantar Media, a global leader in media intelligence, estimates that the annual NCAA Division 1 Men’s Basketball Championship produced a record-setting $1.19 billion of TV ad spending in 2015 and is poised to exceed that amount this year.
The annual collegiate basketball tournament, commonly known as “March Madness,” has evolved into “Marketing Madness.” The NCAA has successfully monetized the sporting event through media rights fees and corporate sponsorship payments while creating a platform for marketers to reap benefits from advertising and promotional programs anchored around the games.
CBS and Turner Broadcasting will again show every game live, with the telecasts spread across the CBS, TBS, TNT and truTV networks. For the first time ever, the championship game will be shown on a cable network (TBS). As in past years, the event will be streamed online, providing advertisers with another outlet to reach viewers. Licensed NCAA marketing partners will also have the opportunity to tightly integrate their products into the tournament through branded placements, experiential events and integrated cross-channel programs.
Modest Growth In TV Ad Spending
Kantar Media estimates that the men’s basketball tournament produced $1.19 billion of TV ad spending in 2015, a 4.8 percent increase from the prior year. This figure includes pre-game, game and post-game programming, as well as studio shows. During the past few years, annual spending growth has been pacing at 2 to 5 percent with about 90 marketers buying air time per year.
Starting in 2011 every tournament game has been aired nationally, producing more ad inventory and contributing to the revenue increase versus earlier years.
A Leading Post-Season Sports Franchise
As measured by national TV ad spending, the NCAA men’s basketball tournament and the NFL playoffs are perennially the two largest post-season sports franchises.
These totals are driven by viewing popularity (which affects ad pricing) and the number of games televised. The number of NFL post-season contests is fixed at 11 and the college basketball tournament is fixed at 67. The other pro sports leagues use “best-of” multi-game series and the total number of games can change from year-to-year, affecting ad revenue trends.
Ad Rates Continue To Rise
The price of a TV spot increases during each round of the tournament and peaks with the championship game. Game telecasts attract larger audiences than studio programming and carry a commensurately higher price. Therefore the average unit cost for an individual advertiser’s package depends on how deep into the tournament it extends and the mix of commercials in studio shows versus game telecasts.
The average price of a :30 unit in the 2015 championship game was $1.56 million, up 5 percent from the previous year.
To put the 2015 pricing in perspective, it was 18 percent less than the AFC/NFC pro football championship games that determined the Super Bowl participants. But it was significantly higher than the College Football Championship game or the most costly air time in other premium sports events.
NCAA Sponsors Dominate Top Ad Buyers
The tournament typically contains TV messages from 85-90 different companies. A small proportion hold dominant positions and each year the top ten consistently account for more than one-third of total spending. In 2015 this select group invested $444 million to reach NCAA viewers.
The top ten is also notable for the number of NCAA corporate sponsors it includes. Seventeen companies currently have marketing and promotional arrangements with the NCAA and are granted a wide variety of benefits, including certain category exclusivity around the use of NCAA logos, marks, designations and event tickets. CBS and Turner negotiate and manage these financial agreements for the NCAA. All 17 sponsors purchased TV air time in the 2015 basketball tournament and accounted for more than 40 percent of total ad spending.
One Week Wonders: Advertisers Who Go Home Early
The tournament takes place over a period of 21 days and some schools don’t make it past the first weekend. The same can be said for some of the advertisers. Last year 96 different marketers showed up and 16 of them ran spots only during the first week of the event before disappearing. In contrast, 50 of the 96 had activity in all three weeks.
Several of the early departees ran comparatively large schedules and had a notable share of voice during their one week of participation.
Several movie studios placed their budgets into a single week of the tournament. These buys were timed to the opening of a theatrical release. Other one-week campaigns included Boeing (corporate promotion), Scotts (early-season lawn care), Miller Beer and Valvoline motor oil.
Automotive Is The Leading Ad Category
Given the share of tournament ad spending connected to NCAA sponsors, the profile of top ad categories is tilted towards their lines of business. Spending by automotive, telecom, restaurant, financial service and insurance marketers was more than one-half of the dollar commitments in the 2015 event.
Each of the top 5 categories had multiple sponsors, affirming the desirability of live sporting events to reach their target prospects.
Digital Marketing Opportunities
In addition to advertising on linear TV, the NCAA men’s basketball tournament has ad-supported digital elements that allow marketers to reach consumers on multiple screens.
All of the games are streamed online through the branded March Madness Live service. Fans can access ad-supported video casts, real-time scores, statistics and other related content through web browsers and mobile apps. Streaming access to live games airing on CBS is freely available. Access to video streams on Turner networks requires an authenticated cable or satellite TV subscription.
According to Turner Sports, which manages March Madness Live, the 2015 tournament generated record levels of online consumption:
- 80.7 million live video streams (+ 17% versus 2014)
- 17.8 million hours of live video consumption watched (+19% percent versus 2014)
Advertisers cannot buy the March Madness Live audience by itself. Sales are bundled with linear TV ad packages and many of the TV sponsors do not appear in the online video casts.
As an alternative, some advertisers seek to leverage the popularity of online tournament brackets by placing digital ads adjacent to this content or by sponsoring contests where fans submit bracket entries and compete for prizes. And of course, general sports and news web sites that are destinations for fans seeking scores, schedules and other related content typically get a traffic boost during the basketball tournament and have their own ad monetization strategies.
Corporate Branding Extends Beyond the TV Screen
Beyond the games and related TV coverage, there are on-site branding and experiential marketing opportunities for top-tier NCAA sponsors. These are most prominent during Final Four Weekend when fan attendance (and interest) is at its peak. Reese’s, the official candy partner, is aligned with Final Four Friday where fans can view the teams’ open practices, take part in on-court promotions and watch the Reese’s College All Star Game. The March Madness Music Fest features three days of live performances and is presented by AT&T, Capital One and Coca-Cola. Capital One is also the presenting sponsor of Final Four Fan Fest, a large sports-themed interactive event located near the basketball arena.
About Kantar Media
Kantar Media is a global leader in media intelligence, providing clients with the data they need to make informed decisions on all aspects of media measurement, monitoring and selection. Part of Kantar, the data investment management arm of WPP, Kantar Media provides the most comprehensive and accurate intelligence on media consumption, performance and value.