TV advertisers, like many others in Hollywood, are holding their collective breaths.
They’re anxiously waiting to see how audiences respond Sunday to ABC’s broadcast of the 88th Academy Awards. The controversy over the lack of people of color among the 20 actors nominated for an Oscar — and calls for a TV boycott of the program — have put additional pressure on the show’s host, comedian Chris Rock, the television network owned by the Walt Disney Co. and the Academy of Motion Picture Arts and Sciences.
Advertisers, who are paying record prices for air time, find themselves in an awkward position.
They want to attach themselves to the glamour of Hollywood without having their brands tarnished by the controversy over the all-white slate of acting nominees. Most advertisers finalized their ad buys last fall, long before the furor. Advertisers agreed to shell out about $2 million for each 30-second spot in the TV program, a new record.
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“This is such a big investment for advertisers,” said Lisa Herdman, director of national programming for RPA, a Santa Monica ad agency. “And advertisers are having to deal with forces that they cannot control.”
ABC is expected to rake in at least $120 million in advertising revenue from the telecast — its biggest haul ever. And much of that money will go to pay the TV license fee to the Beverly Hills-based academy, which depends heavily on revenue from the annual telecast to finance its operations throughout the year.
Industry experts say the debate over diversity in the entertainment industry might boost ratings by increasing interest in the show. Some people might tune in just to see whether Rock skewers the industry in his opening monologue and in his quips throughout the ceremony.
But there also is a concern that audience levels could be depressed, particularly if casual viewers become turned off during the show should the acceptance speeches take on an overtly political tone. In addition, ratings have been down slightly for this year’s other big live TV events, including the Grammy Awards and the Super Bowl.
When Sean Penn opened the envelope to announce the best picture at the 87th Academy Awards, he asked, “Who gave this son of a ... his green card?” before revealing “Birdman” as the winner. In a year when the Oscars were being scrutinized for the lack of diversity among the nominees in the top categories, some felt Penn’s joke about director Alejandro G. Iñárritu’s nationality fell flat.(Robert Gauthier / Los Angeles Times)
After hosting the Emmys and the Tonys, jack-of-all-trades Neil Patrick Harris took over Oscar duties in 2015 with mixed results. In addition to butchering actors' names and making an ill-advised joke about Edward Snowden’s absence, Harris strained the patience of even the most faithful viewers with a running gag involving a magic box holding his winners predictions.(Robert Gauthier / Los Angeles Times)
During a red carpet interview actress Melanie Griffith admitted she had not yet seen daughter Dakota Johnson’s performance in “Fifty Shades of Grey,” implying she was uncomfortable with some of the scenes she would see. When Griffith continued to refuse even the possibility of watching the film, a flustered Johnson responded “All right! You don’t have to see it!”(Jay L. Clendenin / Los Angeles Times)
John Travolta was tasked with introducing Idina Menzel to perform the Oscar-nominated (and later Oscar-winning) song “Let It Go” from “Frozen” at the 86th Academy Awards. Unfortunately, he ended up introducing “Adele Dazeem” in what would become the flub of the night. Ever the professional, Menzel still nailed her performance.(Robert Gauthier / Los Angeles Times)
Jennifer Lawrence proved she is just as human as the rest of us when she tripped on the stairs on the way to accept her best actress Oscar at the 85th Academy Awards. After making it to the stage to a standing ovation, she confronted the situation head-on by saying, “You guys are just standing up because you feel bad that I fell and that’s really embarrassing, but thank you.”(Robert Gauthier / Los Angeles Times)
In 1995, David Letterman was tapped to host the Oscars, but his irreverent humor failed to mesh with the grand tone of the event. Most awkward was a bizarre gag in which he jokingly introduced Oprah Winfrey to Uma Thurman from the stage (say it with us: “Oprah...Uma... Uma...Oprah”).(Christopher Little / ABC)
To open the 1989 Academy Awards, an off-key Rob Lowe sang a duet with actress Eileen Bowman as Snow White as part of an elaborately hokey musical medley that lasted more than 10 minutes and left seated stars such as Dustin Hoffman, Robert Downey Jr. and Sigourney Weaver scratching their heads in confusion. How bad was it? Disney filed a lawsuit against the academy for unauthorized use of its character.(Randy Leffingwell / Los Angeles Times)
Toward the end of the 1974 telecast, co-host David Niven was joined onstage by a male streaker (later revealed as artist-activist Robert Opel) flashing a lot more than just a peace sign. The British thespian expertly turned the disruption into a laugh, saying, "Well, ladies and gentlemen, that was almost bound to happen... But isn’t it fascinating to think that probably the only laugh that man will ever get in his life is by stripping off and showing his shortcomings?”(Associated Press)
“The audience ratings this year are much more difficult to predict,” said Jon Swallen, chief research officer with Kantar Media, which tracks advertising spending. “I don’t think the controversy is going to help the ratings — this year it’s a real wild card.”
One of leaders of the threatened TV boycott, Najee Ali, director of Project Islamic Hope, would like advertisers to be stung by the controversy. “We think the nationwide tune-out of the Oscars will be successful because this conversation about racism and the lack of diversity in Hollywood has been going on for several weeks,” he said.
That adds more tension to the telecast, and gives advertisers heartburn.
“It’s really difficult for advertisers to take a stand on social issues,” said Herdman. “The lack of diversity is a very sad situation, but advertisers are not spending money to support causes. We’re spending money to support our products.”
Last year, 37.3 million people watched the program, making it one of the lowest rated Oscar telecasts in years, according to Nielsen. Audience levels were down 14% from the 43.7 million viewers in 2014, when the show was hosted by Ellen DeGeneres. The talk show host is particularly popular among young women viewers desired by advertisers. And to the delight of audiences, she sprinkled into the program comedic bits, including ordering pizza and a cellphone selfie picture with Jennifer Lawrence, Bradley Cooper and Angelina Jolie. Social media conversations soared, making the Oscars even more valuable to marketers.
Despite the controversy, none of the advertisers who committed to buying time in the Oscars have withdrawn from the show, according to ABC.
The prestigious nature of the Academy Awards, and the huge TV audience, has enabled ABC to charge a significantly higher ad rates compared to what other networks charge for ad time
in the Grammy Awards or the Golden Globes. Last year’s Oscar broadcast generated $110 million in ad revenue, according to Kantar Media. Meanwhile, the Grammy Awards in 2015 brought in $75 million and the Golden Globes generated $42 million in advertising revenue.
The big-ticket nature of the Oscar broadcast ups the ante with advertisers. The show has traditionally attracted advertisers because the TV audience has a higher concentration of high-income viewers. But the overall size of the TV audience continues to be the main draw.
“We think the Oscars are an important space to be in,” said Barbara Shipley, senior vice president for brand integration at AARP. “We are supporting the academy’s efforts to increase diversity,” she said, referring to recently enacted rule changes by the academy. “We certainly need to be sensitive to the issue and we are because we are a multi-faceted and diverse organization ourselves.”
Highlights from the Oscars -- Hollywood’s most prestigious night -- through the years.(Los Angeles Times)
Red Buttons and Miyoshi Umeki hold their Oscars as they embrace after winning for supporting actor and supporting actress for their roles in “Sayonara.”(Los Angeles Times)
A large crowd waits at the Pantages for the arrival of celebrities attending the 32nd Academy Awards.(Los Angeles Times)
Burt Lancaster and Elizabeth Taylor hold their lead actor and actress Oscars -- he for “Elmer Gantry,” she for “Butterfield 8,” at the Academy Awards in 1961.(Los Angeles Times)
Barbra Streisand holds her Oscar at the Academy Awards Governors Ball in 1969. With her is then-husband Elliott Gould.(Los Angeles Times)
Academy Award winners George Roy Hill, left, and David S. Ward with their Oscars -- and Elizabeth Taylor -- in 1974.(Los Angeles Times)
Lead actress winner Sally Field and lead actor winner Dustin Hoffman.(Los Angeles Times)
Sissy Spacek wins for lead actress in “Coal Miner’s Daughter.”(Los Angeles Times)
James L. Brooks, director of “Terms of Endearment,” left, and two of the film’s stars, Shirley MacLaine and Jack Nicholson, with their Oscars at the 1984 Academy Awards.(Los Angeles Times)
Robin Williams with his supporting actor Oscar for “Good Will Hunting” and Jack Nicholson with his lead actor award for “As Good as It Gets” backstage at the 70th Academy Awards.(Los Angeles Times)
Björk on the red carpet at the 73rd Academy Awards at the Shrine Auditorium.(Wally Skalij / Los Angeles Times)
Adrien Brody surprises presenter Halle Berry with a kiss after he wins lead actor for “The Pianist” at the 75th Academy Awards at the Kodak Theatre in Hollywood.(Brian van der Brug / Los Angeles Times)
Presenter Julia Roberts wipes her lipstick kiss off Clint Eastwood’s face as he accepts his Oscar for director for “Million Dollar Baby,” during the 77th Academy Awards.(Brian van der Brug / Los Angeles Times)
Actors Will Ferrell, left and Steve Carell present the Oscar for makeup during the 78th Academy Awards at the Kodak Theatre.(Mark Boster / Los Angeles Times)
Reese Witherspoon kisses her then-husband, Ryan Phillippe, after hearing her name announced as the lead actress winner for “Walk the Line,” during the 78th Academy Awards.(Mark Boster / Los Angeles Times)
Steven Spielberg snaps a photo of Ellen DeGeneres and Clint Eastwood while Beyoncé looks on during the 79th Academy Awards.(Mark Boster / Los Angeles Times)
Forest Whitaker escorts Marion Cotillard off the stage after presenting her the Oscar for lead actress at the 80th Academy Awards.(Al Seib / Los Angeles Times)
Legendary actor Sidney Poitier and actress Angelina Jolie chat backstage. Jolie was the recipient of the 2014 Jean Hersholt Humanitarian Award.(Al Seib / Los Angeles Times)
Actors Liam Neeson and J.K. Simmons, right, chat backstage at the 87th Academy Awards after Simmons won a supporting actor prize for “Whiplash” in 2015.(Al Seib / Los Angeles Times)
With “Star Wars” reintroduced to a new generation by “The Force Awakens” film, it seemed only fitting to have droids R2D2 and C3PO grace the Academy Awards stage once again.(Al Seib / Los Angeles Times)
Brie Larson is ecstatic as she walks off the stage with the lead actress Oscar for her role in “Room.”(Al Seib / Los Angeles Times)
In a “Titanic” meetup, Leonardo DiCaprio and Kate Winslet kiss backstage at the Oscars. DiCaprio won the lead actor Oscar for his role in “The Revenant.”(Al Seib / Los Angeles Times)
This will be the second year that King’s Hawaiian will be featured in the broadcast — an enormous bet for the Torrance-based bread maker.
“We made our decision prior to the controversy,” said Erick Dickens, vice president for marketing. “We are staying the course; we still have confidence in the platform. We think a lot of people will tune in to see Chris Rock, who should be a phenomenal host.”
King’s Hawaiian saw an uptick in bread sales last year — its first appearance in the Academy Awards — prompting the company to return this year.
Squeezing into the national broadcast has become increasingly difficult, in part, because the academy limits the commercial time. In addition, some advertisers, such as American Express and fast-food giant McDonald’s, faithfully advertise each year and pay a premium to keep their main competitors out.
(Top left: Robert Gauthier / Los Angeles Times; top right: Los Angeles Times; bottom left: Robert Gauthier / Los Angeles Times; bottom right: Mark Boster / Los Angeles Times)()
Singer-songwriter Elliott Smith performs “Miss Misery” from the film “Good Will Hunting” at the 70th Academy Awards on March 23, 1998.(Susan Sterner / Associated Press)
Beyoncé, left, Hugh Jackman and Amanda Seyfried perform during the 81st Academy Awards in February 2009 in Hollywood.(Mark Boster / Los Angeles Times)
Randy Newman onstage at the Oscars on Jan. 16, 2011, performing “We Belong Together” from “Toy Story 3.”(Robert Gauthier / Los Angeles Times)
Zach Galifianakis and Will Ferrell, right, present for original score at the Academy Awards in February 2012.(Robert Gauthier / Los Angeles Times)
Channing Tatum lifts fellow dancer Charlize Theron at the 85th Academy Awards on Feb. 24, 2013, at the Dolby Theatre in Hollywood.(Al Seib / Los Angeles Times)
Host Seth MacFarlane is front and center in a performance at the 2013 Academy Awards that includes the likes of Daniel Radcliffe, second from right. Joseph Gordon-Levitt is behind MacFarlane to the left.(Robert Gauthier / Los Angeles Times)
Kristin Chenoweth and Seth MacFarlane sing the closing song at the 85th Academy Awards in 2013.(Robert Gauthier / Los Angeles Times)
Rita Ora performs at the 87th Academy Awards on Feb. 22, 2015, at the Dolby Theatre in Hollywood.(Robert Gauthier / Los Angeles Times)
Common, foreground left, and John Legend, foreground right, perform at the Oscars on Feb. 22, 2015, at the Dolby Theatre in Los Angeles.(John Shearer/Invision/Associated Press)
Lady Gaga appears during the telecast of the 87th Academy Awards on Feb. 22, 2015, at the Dolby Theatre in Hollywood.(Robert Gauthier / Los Angeles Times)
The Weeknd performs “Earned It” from “Fifty Shades of Grey” at the 88th Academy Awards on Feb. 28, 2016.(Robert Gauthier / Los Angeles Times)
Sam Smith performs “Writing’s on the Wall” from “Spectre” at the 88th Academy Awards on Feb. 28, 2016.(Robert Gauthier / Los Angeles Times)
Lady Gaga performs “Til It Happens to You” from “The Hunting Ground” at the 88th Academy Awards on Feb. 28, 2016.(Robert Gauthier / Los Angeles Times)
This year, General Motors will be the exclusive carmaker in the national broadcast.
Kohl’s department store will be the retail advertiser, buying five spots in Sunday night’s program, said Will Setliff, Kohl’s executive vice president of marketing.
The company designed an entire a social media campaign, featuring comedian Vanessa Bayer, around its appearance in the program. The Wisconsin-based retailer is targeting millennial viewers, those under the age of 35, and Latinos.
A key selling point for the Oscar ad buy was that millions of viewers typically watch the ceremony on the big TV screen while holding the so-called second screen, a tablet, laptop or smartphone, to participate in the chatter on social media. That increases so-called viewer engagement.
“The big screen is where we elevate awareness in our brand and we use the second screen to engage with viewers on a more emotional level,” Setliff said. “We believe the viewership of this event will be widely diverse — we are trying to find the best places to reach the modern family, and that, by its very nature is a diverse family.”