NBC Gets Olympic Gold on Ad Sales

As marketers, we're all called to choose among tactics and media in search of the greatest return on dollars spent and impact towards our goals. Strategies can be served in a myriad ways. We get our medals when we perform at peak.

NBC and the network's parent company, GE, chose to realize the most gains from the Olympic Games by directing audiences to the most ubiquitous and lucrative media. Now it is laughing all the way to the bank, according to Wired magazine.

Gold on Sales

Broadcasting & Cable news reported that NBC hit $1b in ad sales, the network's stated ad-revenue target the day before the opening ceremonies and recently reported $10 million more from that day.

With viewers in excess of 107 million or over 95% of total audiences (Nielsen), one can easily see how the television set still dominates the Olympic experience - even when it opens on a delay.

Revenue from advertising is just the beginning. NBC's parent company, GE, has posted $700 million in sales from various projects in and around Beijing, including security equipment for a subway line and airport terminal, medical equipment at the Olympic village, and more than 120 wind turbines north of the city (Wired). 

And of course there is the advantage of being up close and personal with a market that values personal interactions at a local level. Getting to know a business and brand through its people, especially when playing host, is welcome in China (for more insights on the Chinese market, read One Billion Customers by James McGregor).

But is the ad spend effective for sponsors of the games? A report released by the Fournaise Marketing Group on June 2 states that the spend could fail to deliver the effectiveness results expected by marketers and sponsors.

The report highlighted the example of Chinese 100-metre hurdler, 2004 Olympic gold medallist and world record holder, Liu Xiang, who while being sponsored by a limited number of organisations, was shown to be associated by Chinese consumers to a whopping 20 brands – most of whom weren’t even his sponsors!

Silver on Integration

The online experience at the NBC Olympics portal works in harmony with television. In look and feel the site home could be a landing page for a direct response program. The sponsors receive nice exposure from the banner rotation. But for the advertising to be effective, it must focus on the right metrics that truly matter in hyper-cluttered and hyper-competitive market environments – not awareness, not recall, not viewership, not eyeballs, but quantifiable and profitable direct personal engagement with their target audience.

There are many choices at the NBC site - a programming schedule for television that can be searched by zip code and no doubt yield viewers data. An option for viewing on the go is also offered - go mobile! The carriers report that mobile traffic is between 210k and 495k or 0.3 to 0.4% - there is lots of room for growth here.

Online unique visitors ranged between 4.2 and 7.8 million or 5.7 to 7.6% of total audiences (Omniture) in the first few days. Some have complained about the choice of Microsoft Silverlight for the videos. It supports Internet Explorer 6, 7 for Windows, Firefox 1.5, 2, 3 for Windows and Mac and Safari 2, 3 for Mac. However, it seems that people with older Macs with no Intel are having difficulty viewing.

Bronze on Conversation

For all of these nice metrics to work on behalf of the businesses, we will need a new level of depth and correlation to results. What are these ever elusive metrics? Would recall be aided by personal experience? And would it prompt a change in behavior to favor the brand?

There are blogs in the media area of the site. I like that one of the menus offers blogs by athletes, but so far they seem to be all from the US, where NBC operates. I'm pretty sure that if one of those bloggers were Michael Phelps, the traffic (and comments) would be off the charts - probably unprecedented.

Imagine what would happen if Adidas, Nike, Speedo, Omega watches, Power Bars and Visa, Phelp's sponsors, helped take the conversation to the next level. The Olympics is a fleeting event, could new media help sustain interest in the brands that have a stake on the athlete succeeding? 

Would an approachable Phelps, one with a robust personality and charisma, carry the conversation forward? I'm thinking there is opportunity there even if Jay Leno and David Letterman don't come calling. With new media and a little help from the global brands, Phelps could have a personal channel to surf, ahem swim in. This might take care of the US market. How about the rest of the world?

Comments

[gregorylent]

yeah, if you measure everything by money, it was great. if you actually wanted to see the olympics, it sucked. and if you wanted to watch them in real time, effing impossible.

not laudable in my opinion

[gregorylent]

and here is something you, we, don't know how to quantify, how much ill-will did nbc create for their brand?

what do you think will happen in 2012. they are like the record business, the game is over, except for the lawsuits, like the riaa seems to be losing with increasing frequency.

good luck with your career.

[Valeria Maltoni]

Hi Gregory,

I posed the question on LinkedIn [http://tinyurl.com/6hedme ] and was just about crucified by people who thought I was being stupid ;-) You are right and my post reaches pretty much the same conclusion in a subtle way. Sure, they get gold on ad placement, were the companies "buys" smart marketing investments? As a commercial entity, they got the commercial side down - but did they get how the conversation is more about the athletes and the interaction with the audience? Being able to see without interruptions would help fans. Would fans be willing to sponsor the expense?

[Paul]

I guess the challenge I would throw back at you regarding the Phelps example is does it make sense to build personal channel around him when the sheer scale of his popularity is going to far out-scale the usefulness of tools designed for 'conversation'? Even 'hard-core' Phelps fans could be in the hundreds of thousands. Is there a real one-on-one conversation here?

In addition, is there a need to humanize him at all? As a pure symbol of athletic achievement, guts and hard-work is he not more valuable in the symbolic? Nike made a myth out of Jordan, and was very successful. Doesn't taking advantage of Phelps as a symbol lend itself more to dramatic TV ads and short viral vids?

I'm just playing devil's advocate here of course :). But I think there is value in arguing how a social media campaign around Phelps success would benefit his sponsors more/the same as a more traditional Jordan-esq approach. Or do you just do both? Or more importantly, how do you measure if either one is a success?

[Valeria Maltoni]

@Gregory - Great point. Organizations rarely think about the impact of experience on their brand and consequent reduction in value. Those soft things are important.

@Paul - thank you for arguing. I see you have been thinking about social vs. traditional vs. advertising, too. Yes, I used an obvious example that the marketing sponsors would go for. The more interesting stories would be about those athletes that almost made the cut, or those who bet everything on the games and lost or placed second (they say that feels worse than placing third). Also, I am a strong believer in integrating media. Online you can measure success in many ways - you've got to have clear goals and strong calls to action, too. I am working on a post on Web measurement as I recently attended a panel discussion on that. Good hearing from you and liking your new layout/design.