The Oscars Commercial
Breaks
By: Katelyn Elvers
Many people think of the Oscars as this
luxury event held by the academy to give awards to stars and movies to commend
them for their outstanding work in the movie making industry. However the real
Oscar prize goes out to ad companies for spending millions of dollars to air
their commercial during the Oscar commercial breaks, for without the ads the Oscars
would not air on live TV every year.
Much like the price of movie tickets, the cost airing ads during the Oscars
continues to rise. The 30 second slots for the ABC broad cast, during the
Oscars, cost roughly $1.8 million; that is an increase of 10% vs. the 2013 ads,
according to a report from specialist Kantar Media.
So why do companies pay so much? Well commercial time at the Oscars is scarce.
The Oscar boasts having a low number of commercials averaging out to about
eight to ten minutes per hour including promotional sports for ABC’s other
programming. In contrast, a typical prime-time hour contains 16 to 17 minutes
of commercial time. Does this mean airing an ad at the Oscars is a smart
investment? Well that question cannot be answered until the marginal benefit is weighed against the
marginal cost.
The marginal benefits of airing your commercial during the Oscars is
the audience and the fact that
everyone wants to watch the Oscars live so your commercial is guaranteed to be viewed.
To put the audience number in perspective this past Academy Awards was
televised live to more than 200 countries. .
This graph above shows the total
amount of money spent in millions versus the amount of 30 second intervals of
Oscar commercial airing time. After three
consecutive years of stable ad prices and revenue, the average cost of a
30-second ad during the Academy Awards fell 22.6% in 2009, to $1.31 million,
from $1.69 million the previous year (Kantar Media). However if this graph was
extended it would be clear that the prices of ads have gone up as the audience
of viewers grows and the demand for a time slot increases.
Big-event TV
seems to have found a happy home in multimedia sweet-spot. These events, which
also include the Super Bowl, Grammy Awards and the Golden Globe Awards tend to
not only attract huge TV viewership but also massive multimedia followings.
Many large companies and advertising agencies view these huge televised events
as rare opportunities, where they can reach a big, live audience. In addition
these companies know that the audience cannot simply fast forward through their
entire commercial. However not any company or store will air their commercial.
The companies that air their commercials normally reach out to the female market because in a way the “Oscars is
like the super bowl for girls” (Swallen). The chart below shows the Top
advertising companies of 2009 that purchased a 30 second commercial time slot
during the Oscars.
As expected by
the chart above the many companies that bought a time slot reached out to the
female market (Department stores, cosmetics, and Hair Care). In addition have
the money to air their commercial will say it is worth spending tone of money
to air commercial during the Oscars, because everyone is watching.
Sources:
"Real-World Education for Modern
Marketers." MarketingProfs. N.p., n.d. Web. 11 Mar. 2014.
<http://www.marketingprofs.com/charts/2010/3448/academy-awards-advertising-711m-over-past-decade>.
Never thinking about how the Oscars make their money, but by doing so through commercials make a lot of sense. Like you were kind of talking about, the marginal benefit is worth the marginal cost. Because so many people watch the Oscars every year spending that amount of money just for a 30 second commercial would really help out a company looking to make money. Also because companies are in such high demand for an air time where so many people are going to be watching the Oscars are able to keep raising the prices because these top dollar companies are willing to pay for it. Until the advertisements say no the prices are too high, then the Oscars are going to be making more and more money every year.
ReplyDeleteIt is a well known thing to have more commercials aired at a “special” time, much like during previews at the movie theaters or during the Super Bowl. The Oscars is a big enough award show to draw a lot of attention from everywhere around the world, and the more movies that are popular are nominated, the more the audience starts to pay attention; which makes sense as to why the prices of ad service increases when the demand increases as well. I agree that the Oscars is a “super bowl for girls”, even though I watch both, I am more interested in a 3 hour show of what actor won what then watching guys tackle each other. I never thought that the price would rise up to $1.8 million for just 30 seconds of air time. It shows that specific companies who really want or need their name out there will keep paying the “inelastic” price until it reaches billions.
ReplyDeleteThe entertainment business deals with insanely large amounts of money. The fact that one 30 second commercial to broadcast during the Oscars can cost $1.8 million and can even exceed that is crazy. There is also a huge risk factor in spending that much money on a commercial. Companies obviously want to gain popularity, but there is a chance of audience members not even watching the commercials. Even though there are people who look forward to the entertaining commercials in events such as the super bowl and even the Oscars, not everyone watches. With the new technology of DVR, people who record the show can just skip right through commercials. There is always the risk that the marginal cost will be higher than the marginal benefit. Companies have the potential to be more popular in the long run but could also financially leave them out of luck.
ReplyDeleteI think you did a great job and thought of an interesting topic to talk about; it is something that many people do not think about watching an award show rather than something like the superbowl. While you had a good argument about the marginal cost and the marginal benefit. See as, Leah V said, now with the newer DVR has been out, when people record shows like the Oscars like I did, even if I started a half hour late, I fast forwarded through all the commercials because I wanted to see what the next award was going to be! I think that the marginal cost may possibly outweigh the benefit because the fastforwarding, another reason is because while these shows go late at night. Like I did, I didn't watch it all and watched the ending the next day again fastforwarding through the commercials. I think it is different than the Superbowl because, even though there are huge sports fans who watch for the football, the Superbowl is known for the hilarious commercials they put out every year, therefore I believe the cost is much more than the benefit. Otherwise good article!
ReplyDeleteThe Oscar's is a very glam time of the year that draws in thousands of viewer's for the fancy outfits and overall spectacular show. It makes sense for companies and businesses to spend this much money on a commercial slot, because so many people tune in to watch and having their businesses advertised during this time will most likely draw in new costumer's. I didn't realize this until you said it, but they commercials during the Oscar's do focus more on the female market because of the glitz and glam that is shown, which draws in more of a female crowd. This was good topic to discuss, because without reading this I would've just thought that they were normal commercials, not a competition to see who can get the 30 second slot before time runs out.
ReplyDelete