March 10, 2014
March Madness Generated $1.15 Billion In Ad Revenue In 2013
Historical Advertising Data Showcases Ad Revenue, an Expanding Digital Presence, Biggest Spenders and Comparisons Against Other TV Sports Franchises
New York, NY, March 10, 2014 – As sports fans across the country get ready to fill out brackets predicting the outcome of the NCAA Men’s Division I Basketball Championship, advertisers are also eagerly anticipating the 21-day event known simply as “March Madness.”
CBS and Turner Broadcasting will again show every tournament game live and spread the telecasts across the CBS, TBS, TNT and truTV networks. For the first time ever, the semi-final round will be shown on cable. For this inaugural coverage, Turner will simulcast the games on three channels, customizing two of the feeds to the participating teams. As in past years the entire tournament will also be streamed online, providing marketers with more options to reach and engage fans.
“March Madness is a marquee sports franchise and it ‘s an attractive opportunity for marketers to connect with consumers over a three week period via multiple touch points including linear TV, online, social media and in-store,” said Jon Swallen, Chief Research Officer at Kantar Media. “It’s an ideal event for integrated programs and when used correctly it can be a powerful vehicle for brands.”
An analysis of trend data by Kantar Media shows how the tournament has evolved over the past decade to become one of the largest and most valuable properties in all of television sports.
TV Ad Revenue
Over the past decade (2004-2013), the NCAA men’s basketball tournament has triggered more than $6.88 billion of national TV ad spending from 269 different marketers. Ad revenue in 2013 was $1.15 billion, up 3.8 percent from the prior year.
Since 2011, every tournament game has been aired nationally, producing more advertising inventory for sale – and sharply higher revenue - as compared to earlier years.
The Top Franchise in Post-Season TV Sports
The NCAA men’s basketball tournament edges out pro football for the honor of most lucrative post-season sports franchise as measured by national TV ad revenue. With $1.15 billion of ad spending from 65 games the 2013 tournament beat the 11-game NFL playoffs by $51 million and the NBA post-season by $223 million.
As recently as 2009, post-season NFL ad spending surpassed men’s college basketball by $164 million. Since then, there has been a $215 million swing towards hoops.
Price of Advertising Grows
The price of a TV commercial rises during the tournament and peaks with the championship game. The average cost to an individual advertiser is principally affected by how deep into the event its package extends and the mix of air time between game telecasts and pre- or post-game studio programming.
In 2013, the average price of a :30 unit in the championship game was $1.42 million, up 6.0 percent from the prior year.
To put this pricing in context, it’s modestly lower than the AFC/NFC pro football championship games that determine the Super Bowl contestants but much more expensive than the top-priced air time in NBA and MLB programming.
The tournament typically features 80-90 different TV sponsors. A small number of advertisers hold dominant positions and the top ten consistently account for more than one-third of the total TV ad spending each year.
In 2013, the top ten advertisers invested a total of $427.3 million to pitch their messages at NCAA viewers.
The Media Value of On-Screen Sponsor Exposure
In addition to paid spots during the TV coverage, some sponsors also derive value from other forms of on-screen exposure. The most common are on-screen graphics, signage around the basketball court visible to the TV audience and studio sets with branded desks for the announcers. But even an innocuous camera shot of a player drinking from a cup or squeeze bottle with a marketer’s name on it can generate value.
In the 2013 NCAA men’s basketball tournament, sponsors received a total of $65.1 million in sponsorship media value (SMV) from these branded placements. SMV is a proprietary calculation developed by Kantar Media, which takes into account the duration, source and prominence of a sponsor’s on-screen exposure and compares it to the impact of an equivalent TV commercial message.
Capital One, AT&T, Buick and Coca-Cola each had large sponsorship packages in the 2013 event and derived the most media value from their additional on-screen presence.
Leading Ad Categories
Like many major live sporting events, the men’s basketball tournament attracts a male-skewing audience and this influences the roster of top ad categories. In 2013, ad spending from the five largest categories was $668.0 million and accounted for 58.0 percent of total ad revenue.
Spending in these categories is distributed across a number of directly competitive marketers. For example, in 2013 there were messages from seventeen different auto nameplates and eleven different restaurant brands.
Advertisers Who Put All Their Eggs In One Basket
Companies with big ad schedules in the tournament face another important strategic decision on how to approach consumers during the three-week event. Should they invest all of their national TV budgets in NCAA coverage or spread the buy around and use non-NCAA programming on other networks to reach different audiences? Diversification can prevent message wear out and poor engagement among hard-core viewers who watch lots of games and are most exposed to commercials. Meanwhile, concentration can offer marketing scale and, for companies that have separate sponsorship deals with the NCAA, an opportunity to use TV as the foundation of an integrated program that includes other elements solely available to NCAA partners.
In 2013, several advertisers with very large positions in basketball broadcasts opted to put nearly all of their eggs in just the single basket when it came to TV. During the three weeks when the men’s basketball tournament took place, these companies placed more than 90 percent of their total network and cable TV spending into the event.
Strong performance with viewers
Analysis of Kantar Media’s second-by-second Return Path Data for the 2013 NCAA Basketball Tournament found the games delivered very impressive results, delivering almost two-thirds (65.7%) of total households (as defined by tuning into for at least one second for any game). CBS reached almost 60% of total households across the 26 games they telecast. The tournament also attracted remarkable “bracket conscience interest,” with each household tuning in to an average of 8 games.
From the advertising perspective, CBS also scored major points with marketers by delivering superior audience retention during commercials. For the games they telecast, CBS registered a 92.7 commercial tuning index (CTI), meaning the commercials averaged 92.7% of the games’ audience and experienced minimal commercial avoidance. This is 4 points higher than the average CTI score for live primetime programming of 88.8. (The drop in audience between program and commercial breaks is primarily caused by viewers who tune away to another channel when ads appear and then return to the program.)
Many advertisers benefited from where their specific commercials were placed within the game. For example, a Powerade spot which appeared on TBS’s matchup of Syracuse vs. California scored the highest CTI of the tournament with a 168.2.Conversely, the Bud Light spot which ran within the Temple vs. North California State game on TBS could only deliver a 24.3 CTI. This means that the audience to the Bud Light ad was less than 25% of the game’s average audience. Note that both of these games were ultimately decided by 6 points or less, indicating the placement of the ad was more important than the score in terms of commercial value.
An Expanding Digital Presence
In addition to a wide linear TV opportunity, the NCAA men’s basketball tournament also offers marketers the ability to connect with consumers via digital platforms.
All of the games are streamed live via the “NCAA March Madness Live” platform and fans can access the ad-supported videocasts free of charge on PCs, tablets and smartphones. Streamed video consumption is highest during the first week of the event, when multiple games are being played simultaneously.
According to Turner Sports, which manages the online video initiative, the 2013 tournament generated a record-setting volume of live streams:
Over the first two weeks of the 2013 tournament, when games were played on Thursday through Sunday, the proportion of video streams consumed on mobile devices (tablets and smartphones) grew from a 49 percent average on Thursday-Friday to a 61 percent average on Saturday-Sunday. It’s an obvious and expected pattern that reflects people leaving their offices and workplace computers for the weekend and migrating to their mobile devices.
The basketball games also generate second-screen social conversation among fans. Last year there were 16.3 million comments posted on Twitter and Facebook during tournament coverage, according to an analysis conducted by the NCAA. More than 30 percent of these occurred during the championship game. Social TV presents an opportunity for agile marketers to place tailored, real-time tweets and ads that connect their brands to the basketball event.
About Kantar Media
Kantar Media provides critical information that helps our clients make better decisions about communications. We enable the world’s leading brands, publishers, agencies and industry bodies to navigate and succeed in a rapidly evolving media industry. Our services and data include analysis of paid media opportunities; counsel on brand reputation, corporate management and consumer engagement through owned media; and evaluating consumers’ reactions in earned media. As the global house of expertise in media and marketing information, Kantar Media provides clients with a broad range of insights, from audience research, competitive intelligence, vital consumer behaviour and digital insights, marketing and advertising effectiveness to social media monitoring. Our experts currently work with 22,000 companies tracking over 4 million brands in 50 countries.
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