Who will win marketing gold?
A Reuters story out of Beijing says Michael Phelps could rake in $30 million in endorsements. Not too shabby.
“In the short term, he is a gold mine because he represents everything that is pure, young, strong and visionary about America. We haven’t had anyone of this significance since Mark Spitz,” Eli Portnoy, chief brand strategist at the Portnoy Group, a U.S. consultancy specialized in branding, said in the article.
“Guaranteed there will be marketers wanting a piece of him that make no sense and it will interesting to see how his handlers cope with this and if they get greedy because the Olympics has a narrow avenue of marketability.”
Phelps already represents Visa, among many companies. And the Wall Street Journal says Visa is now hunting for the next batch of athletes who we’ll see splashed across magazines, billboards and television sets.
As the head of global sponsorship management at Visa Inc., (Michael) Lynch seeks out Olympic athletes to represent the brand. The company has sponsored U.S. Olympic athletes for more than 20 years, from decathletes to skiers, and now has deals with 15 U.S. athletes in sports such as track and field, snowboarding, BMX racing, gymnastics and swimming. It sponsors beach volleyball player Kerri Walsh and gymnast Nastia Liukin. It also has deals with more than 70 international athletes.
Even as Mr. Phelps and others go for gold, Mr. Lynch is talking to coaches, the U.S. Olympic Committee and NBC executives, looking for athletes who can represent the company in the 2012 London Summer Olympic Games. The goal is to find athletes who are relatively under the radar and may peak in three or four years, Mr. Lynch says.
Take cover: Forecast darkens for cable spending
Anybody out there in TV land riding an Olympic buzz (NBC’s ratings have been scorching) will be brought back down to earth by these numbers from SNL Kagan.
Cable TV ad revenue is forecast to grow at just 4.7 percent in 2009, the firm says. That compares to growth of about up 10 percent for 2008, when cable has been one of the few bright spots for media. Or as paidContent sums it up, ”This year appears bad enough for media revenues, but for cable TV, 2009 is nothing to look forward to.”
The SNL Kagan numbers back up concerns that were voiced in an article by Reuters’ Kenneth Li after Viacom’s quarterly earnings report last month.
Although the portfolios of each conglomerate varies, making sweeping generalizations difficult, what unites them is a fear that a dramatic halt in newspaper and local advertising could seep into national advertising, namely cable and broadcast networks.
It is all the more troubling because cable networks are seen riding a high as their shows vie for award nominations as aggressively as they court broadcast viewers.
Here’s what the Wall Street Journal says about the SNL Kagan report:
In recent weeks, several cable-network groups have reported double-digit ad-revenue growth in the first half of 2008, bucking the weakness in the rest of the ad market. In part, TV advertisers have been saving money by shifting dollars from broadcast to cable networks, which cost less. “But that can’t go on forever,” says Derek Baine, a senior analyst at SNL Kagan. “Cable networks are already seeing demand slow, and that trend will likely continue and get worse as broadcast networks roll out their fall season.”
Well, there’s always booming Internet advertising.
NBC winning big in the games
NBC is putting up big numbers so far in the Olympics.
Start with the opening ceremony. While some complained that the event couldn’t be seen live in the United States, the move to delay the broadcast and run it during prime-time paid dividends. Some 34 million viewers tuned in, up about 35 percent since the last summer games.
Indeed, helped by the splashy opening ceremony and the star power of swimmer Michael Phelps, NBC is setting the stage for what could be record Olympic viewership in America. Over the first two days of its coverage, NBC has attracted a record 114 million total viewers – 4 million more than Atlanta in 1996 and nearly 20 million more than Athens in 2004.
Those numbers suggest that Web coverage hasn’t taken away from NBC’s TV audience.
As the Wall Street Journal writes:
In the first two days of the games, 90% of viewers watched the Games on TV alone, with nearly 10% watching on TV and online, according to Alan Wurtzel, NBC’s president of research. Only 0.2% watched on the Internet alone, Mr. Wurtzel said.
“The streaming will not diminish the ratings,” said Neal Pilson, a sports-media consultant who advised the International Olympic Committee in negotiations for broadcast rights. “It encourages viewers and provides them with information. There will be no dilution or fragmentation of the national audience.”
That will be $1 billion, thank you very much
NBC Universal has officially locked up more than $1 billion in advertising sales for the Olympics — and says it has more to sell as the games begin on Friday.
The media company majority-owned by General Electric has said all along that it was aiming for sales in excess of $1 billion, and has trumpeted the 3,600 hours of coverage it is running across the NBC network, cable channels, and online sites.
By some estimates, 30-second TV spots have been going for around $750,000, showing that live events are commanding top dollar from advertisers because they represent one of the few programming choices that consistently draw mass audiences. Moreover, viewers tend to watch such broadcasts in real time, rather than on digital video recording devices that allow viewers to skip through commercials.
Oh yeah, presidential candidates John McCain and Barack Obama have bought spots, too, undoubtedly for the same reasons.
That’s all very good news for NBC Universal, which can take the first victory lap of the games.
But there is more to consider looking out over the next couple of weeks. Namely, are the ratings going to justify all this spending? After all, since the last summer Olympics, media choices have only expanded. The same movement to online that NBC is trying to take advantage of, with its streaming web video, is the very thing that could hurt its ratings.
What about the potential for violence? Protests? Marketers have largely stuck to the argument that the Olympics are a showcase for athletes and they aren’t concerned about the politics — but are any of them going to be all that happy if commercials end up running against a backdrop of violence?
On a funnier Olympics note, the comedy website 236.com had a great feature/recap on The Olympics: http://www.236.com/news/2008/08/06/anoth er_desperate_attempt_to_m_8097.php
Just what Yahoo needs: more controversy
Hey, did someone mention hanging chads?
Not yet, but one of Yahoo Inc’s largest and most critical shareholders, Capital Research Global Investors, has asked for a probe of last week’s shareholder vote, which was widely seen as a pat on the back for Chief Executive Jerry Yang.
Yang, who has been under pressure since Yahoo and Microsoft failed to agree to a deal, received 85.4 percent support in the results announced on Friday, with the remaining votes withheld in protest.
“I guess Jerry Yang didn’t come out of the meeting as unscathed as it seemed,” Canaccord Adams analyst Colin Gillis said of the uncertainty raised by calls for a recount.
The New York Times describes the situation this way: “The recount was requested because the total number of votes cast appeared too low, according to a person with knowledge of the matter who asked to remain anonymous because he was not authorized to discuss it. The person said that Capital Research believed that any undercounting of votes was most likely due to a technical mistake, not any tampering with the vote.”
Questions over the vote – first reported by the D: All Things Digital blog – is the last headache Yang/Yahoo need. Yang’s position seems secure, even if the final vote count changes somewhat. But the point is that the company is still trying to put the Microsoft mess behind it, and would clearly rather avoid any more bad publicity.
Keep an eye on:
Olympics: The good and bad of a country
China and the Olympics bring up thorny subjects about media coverage, politics and human rights. The recent devastating earthquake that killed more than 68,000 people introduces a whole new angle to the games and how the media will cover them.
As chairman of NBC Universal Sports and Olympics, Dick Ebersol is keeping close tabs on the situation. He was asked about it during a call with reporters today. Here’s what he said:
I have to say that when the IOC gave the games to the Chinese in 2001, I was in Moscow that day. The feeling I came away with that day was it would be a major changing event for China. I knew it would be a rocky road to get there and there would be lots of protests and opposition movements but I really believed as I’ve seen happen so many times — this is the 40th year of my life that I’ve been involved with the Olympics — and every country, particularly those that were not democracies that hosted the games were changing events for that society.
I haven’t been in China a little over three weeks. But just in the three weeks, the earthquake and incredible openness that it brought for the first time to modern China in terms of how they dealt with the issue, in terms of media, and now, as they’ll have to deal with it in terms heartbreaking reactions of some of their people over whether building standards were met.
These are not things we would have read about or seen much about, even here in this country, 10 years ago. Reporters would not have been able to have the access, and you certainly wouldn’t have seen reporting of this in the Chinese media. I think you have to say that once again the Olympics have opened up another region of the world. Has it opened up as much as some would like? Obviously not. But it’s part of a process that always seems to come with the Olympics moving on to a new area. Because with it always brings exposure to both the good and bad of the country.
With the Olympics still a couple of months away, we’re bound to hear more from Ebersol on the subject. Stay tuned.
The olympics is money for the media, incredible amounts of money, so where ever the olympics may be held the media will follow. There was concern about how the media would be used by China, & media people made all the correct noises about freedom & so China said there would be media freedom, but freedom outside China & freedom inside China are hardly likely to be the same thing & are proving not to be. But the media got the Chinese promise & that is all that matters, that is all they needed, truth doesn’t come into it.
The sport? What about the sport? What has that got to do withy anything?
GE: NBCU not for sale
NBCU is not for sale. Got that?GE Chairman Jeff Immelt plans to put to bed persistent rumors that the industrial conglomerate is considering courting buyers for its broadcast, cable and movies division after the Beijing Olympics, according to the New York Times, citing Immelt’s note to GE investors in its annual report that will be filed on Wednesday.NYT quotes from the letter:“Should we sell NBCU? The answer is no!”"I just don’t see it happening. Not before the Olympics, not after the Olympics. It doesn’t make sense.”Immelt tells investors NBCU earnings are also expected to jump 10 percent this year.Speculation gathered steam last October after the Financial Times reported about Immelt considering NBCU’s fate only after the Olympics in August, citing unnamed sources. That set the chatter mill abuzz with scenario-spinning with potential suitors for pieces, if not the whole.But who really wants a broadcast network — and who doesn’t already have one — these days?(NYTimes)Keep an eye on:
- Hulu launches, finally. (Reuters)
- Spitzer, from all angles. (HuffPost)
- Disney sees $1 billion from online content revenue in 2008, up from $700 million in 2007. (paidContent)
- AOL replaces head of Platform A after just seven months. (NYPost)
(Photo: Reuters)
GE Chairman Jeff Immelt needs to be fired. Jack Welch must be having a heart attack to see him neglect an outstanding company like GE and use the company to promote his personal political agenda. The company is suffering and he does not care. What will it take to get him fired and put in a real businessman.
