Oscars Ratings Drop Sees ABC Offering Advertisers Guarantees For First Time; Network Denies

By Dominic Patten, Dade Hayes


EXCLUSIVE: The Academy Awards looks to be going without a designated host on Sunday for the first time since 1989, but broadcaster ABC had to break some new ground this year in the era of plummeting ratings.

Even before the host and category chaos that have hobbled the ceremony in recent weeks, the Disney-owned network found itself forced to guarantee a ratings threshold to keep the deepest-pocketed buyers happy.

“The Oscars are still a very big deal, but people aren’t stupid, and year after year of declining ratings are getting us to a danger zone,” an insider told Deadline of the need for the guarantees after several years of record-low demo and viewership results for the Academy Awards.

“We are right on the edge of that danger zone — not close, but on it — and that makes advertisers very nervous,” the source added, noting it was long-term advertisers such as car companies, beer companies and consumer technology companies that got the threshold guarantees and the make-goods baked in if necessary.

Associated Press

Down double digits from 2017 and falling to a new all-time low, the 90th Oscars snagged 26.5 million viewers and a weakened 6.8/24 among adults 18-49.

“It’s very unlikely that things will fall so radically this year that they’ll drop beneath those thresholds, but the fact is that there finally had to be such guarantees was a wake-up call to everyone,” another exec told us of the standards ABC agreed to for the notoriously long-running Academy of Motion Pictures Arts and Sciences show.

ABC emphatically rejected the notion that it has put any kind of numbers forward, even a conservative threshold.

“The Oscars is one of the most highly sought-out live events in the industry. Historically, we have never guaranteed Oscars, and this year is no different,” Doug Hochstadt, Revenue and Yield Management for Disney Advertising Sales, said in a statement provided to Deadline.

Seeking to raise the bar on that last commercial pod, ABC has been advocating for years for the Oscars to be a more succinct show. No matter that the broadcaster pays north of $85 million annually for the ceremony, ABC has only an advisory capacity, and any final decision — as we saw with the now-abandoned plan not to air some categories live, is up to AMPAS.

Having said that, when it comes to the bottom line, ABC sold out its ad inventory for the 91st Oscars earlier this month. Samsung, Google, General Motors, Walmart, Verizon and McDonald’s among those who will have spots on Sunday weaving their messages among promos for Disney movies like Captain Marvel and ABC shows like Whiskey Cavalier.

Sentiment about bang for advertisers’ buck on the Oscar telecast has been mixed among media buyers and market analysts, though the prevailing view is that despite plenty of erosion, the Oscars are still beachfront property.

One senior executive at a rival network took note of the plunging ratings, which dropped 19% in 2018 compared with the prior year. But the normal rules of guarantees and make-goods do not necessarily apply to major live events like the Oscars or the Super Bowl, the executive added. “In today’s landscape, these are long-term relationships between buyers and networks and there are so many more levers to pull in terms of keeping brands satisfied with what they are spending.”

Well, Yes and No, as this unique Oscar year reveals. Still, at least when it comes to the ceremony indecision and fumbling of the initial Kevin Hart host pick, ABC’s official position is pure NP.

The net has continued to take the stance that the network’s president Karey Burke put forward during TCA winter press tour a few weeks ago, which was essentially that controversy has been great for awareness. Advertising rates, notably, have not been affected. A 30-second spot went for nearly $2.2 million, fractionally higher than last year’s level, and ABC says it sold out of its inventory by early February.

Sunday is expected to be the single-biggest revenue day of the year for the Disney-owned network.

A report by Kantar Media about the 2018 Oscar broadcast found that the network sold $149 million in ads, including spots during red-carpet coverage. Unlike the NFL or other live-event mainstays like the Hollywood Foreign Press Association, the Academy limits the number of ads during the show. The commercial load has been in the 12-minute range per hour over the past several years, which is a few minutes lower than the typical broadcast network average.

Jerry Daniello, senior VP of entertainment brand solutions for Disney Advertising Sales, said the Hart controversy, the “host/no-host” dilemma and the public flip-flop over cinematography, editing and other trophies “has not affected advertiser interest.”

Instead, he said, “It has sparked more creative ways of how to surround the programming with brand messages.”

When the Academy floated the idea of relegating some key categories to commercial breaks, “there were a lot of conversations” with advertisers exploring ways to have them “surround” those breaks in a way that would tie in with the categories, Daniello said. After a storm of industry protest, the Academy reversed its decision and will include all categories live on the air.

Sixteen advertisers will debut new creative materials or entirely new campaigns during the broadcast, ABC says, a record high in recent years. Director Ridley Scott handled a spot for Hennessy’s first-ever Oscar ad, and Charlize Theron will add some A-list glamour to a Budweiser ad. Walmart, a frequent Oscar-night presence, is taking a new tack with a half-dozen 15-second ads focusing on below-the-line industry figures like a stuntperson, a production assistant and a hair and makeup artist.

“At these prices, and at the value that you get, the advertising is not going to be run-of-the-mill, things you saw last week,” according to Fred Chassé, senior VP at Analytic Partners, a consultant to brand marketers. “For a lot of marketers, there will be a hit to ROI,” he said.

Jeff Greenfield, co-founder and COO at ad tracker C3 Metrics, believes bean counters are looking at the show the wrong way if they judge investments purely on ROI for a given spot on the linear broadcast.

“These not a one-screen type of thing,” he said. “Consumers are not stuck on the TV screen. They are always looking across digital and that gives you so many more opportunities.”

Despite the relentlessly downbeat media narrative around the show, he said, “People are still going to tune in, whether it’s on TV or on their phones.”

Kevin Krim, CEO of EDO, a TV measurement and analytics company founded by Daniel Nadler and Edward Norton, says the company found that viewers of ads during last year’s ceremony were 77% more likely to engage online with an advertiser compared with those who saw an equivalent ad during ABC’s regular primetime shows.

“The ratings have been trending downward, but engagement is still high,” he told Deadline in an interview.

Added Greenfield of C3, “At the end of the day, these are still the Oscars.”

Until they aren’t anymore.

This article was printed from https://deadline.com/2019/02/oscars-ads-abc-ratings-concerns-threshold-guarantees-1202562868/