Academy Awards Spending Topped $650 Million Over Past Decade

NEW YORK, February 19:
According to a new report from TNS Media Intelligence, marketers have spent
more than $650 million during the past decade to advertise during the live
network TV broadcast of the Academy Awards ceremony.

Total ad spend in the
Academy Awards has almost doubled over the past ten years, but the cost of a
30-second unit in the ceremony has consistently been about 35 percent less than
the Super Bowl. In 1998, the advertising rate for a 30-second spot in the
Academy Awards was only $950,000, with a total ad spend of $40.9 million. In
2007, the price of a 30-second spot jumped by 75 percent to reach $1.67
million, with a total ad spend of $80 million.

Over the past decade,
total ad spending in the Academy Awards has been $651 million. A short list of
blue-chip advertisers, representing a diverse range of categories, have
accounted for more than 60 percent of the total amount. General Motors,
American Express, JC Penney, L’Oreal, McDonalds and MasterCard have been recurring
sponsors. Pepsico, which was a sponsor through 2005, and Coca-Cola, which took
over the beverage category sponsorship in 2006, round out the top of the list.
The aggregate spending from these marketers during the past ten Academy Award
shows is $381.2 million.

The Academy Awards has
also fared well with its annual retention of advertisers. On average, over the
past ten years, 75 percent of the yearly ad spend in the telecast has come from
advertisers who bought time the previous year. This is a higher retention level
than the Super Bowl achieves (63 percent).

As the industry attempts
to regain its footing following the Hollywood writers’ strike settlement, TNS
says that the Academy Awards becomes an early “litmus test” for broadcast
network TV and its ability to recapture lost viewers, with audience ratings for
the show to be closely scrutinized. According to TNS, audience levels for the
Academy Awards have declined by about 25 percent over the past decade. Compared
to last year’s Super Bowl, which had achieved a 42 percent household rating,
the 2007 Academy Awards had only notched up a 23 percent rating.

In recent years, the show
has been averaging 9-10 minutes of network ads per hour. This amount includes
7-8 minutes of paid messages with the remainder being promotional plugs from
the network for its own programming. The comparable figure for the Super Bowl
is 10.5-12 minutes per hour and for a typical hour of prime-time network
programming it is 14-15 minutes.

In a typical year, there
are several advertisers who run spots in both the Academy Awards and the Super
Bowl—one-fourth to one-third of Academy Awards advertisers also bought
time in the Super Bowl. In 2007, 4 out of 15 advertisers in the Academy Awards
had also aired spots in the Super Bowl with a 27-percent overlap. However,
every four years, the Winter Olympics provides advertisers with a third option
to the Academy Awards and the Super Bowl. This was the case in 2006, where many
perennial mutual Oscars and Super Bowl advertisers opted out of one of these
events in favor of the Olympics.

—By Irene Lew