ABC notched record sales this year of commercial time for Sunday’s 87th Annual Academy Awards show.
The price of a 30-second commercial spot during the telecast reached an average of $1.95 million, up 8% from last year, according to people familiar with the sales. The lofty prices could help the network rake in more than $100 million for commercial time during the three-hour show.
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Both ABC and the Academy of Motion Picture Arts and Sciences have been riding high after last year’s Ellen DeGeneres-hosted broadcast attracted the show’s largest audience in a decade with 45 million viewers. This time around, Neil Patrick Harris is the host and ABC completed its commercial sales earlier than usual — and some spots went for more than $2 million.
“The Oscars went pretty quick this year,” said Andy Donchin, chief investment officer for Dentsu Aegis Network, a major advertising company. “These big tent-pole television events remain very attractive to advertisers.”
The rush to buy up ads was an accomplishment because the overall TV advertising market has been sluggish this season.
It also comes during a year when there were few big movies among the best picture nominees, with only “American Sniper” surpassing the $100-million mark at the box office.
Big-ticket events that people watch live have become more valuable to marketers because viewers tend to watch the commercials, rather than record the show and fast-forward through the ads. That’s one reason Super Bowl ads this soared to $4.5 million for each 30-second spot.
Advertisers are also getting the added bonus of the social media buzz as viewers chime in on Twitter and Facebook, driving up interest in the telecast. Last year, Ellen DeGeneres posted a selfie with Bradley Cooper, Brad Pitt and other stars that broke a Twitter record by being shared 3.4 million times.
Advertisers also continue to eye the awards because it connects their products to the glitz and glamour associated with Hollywood.
“Our national profile is just starting to rise,” said Erick Dickens, vice president of marketing for bakery King’s Hawaiian, which is advertising during the Oscars for the first time.
“This is, by far, the biggest advertising audience that our brand has ever had,” Dickens added.
The Torrance bakery, which is in the midst of an East Coast expansion, had weighed whether to advertise in the Super Bowl but instead went the award show route to capture its target audience of women. The company rolled out its new campaign during the “People’s Choice Awards” on CBS last month.
Also advertising this year is General Motors’ Cadillac, AARP, Samsung, Coldwell Banker and J.C. Penney. Retailer Penney has been featured in the telecast for more than a decade.
McDonald’s is set to make its 24th straight appearance in Hollywood’s biggest night, and American Express Co. will mark its 23rd year. Some new entrants include Netflix and PetSmart.
The rate at which Oscar advertisers return year after year dropped off significantly after the Great Recession and financial crisis hurt companies, according to advertising analysis firm Kantar Media.
Only 43% of advertisers last year were holdovers from the previous show, whereas before the recession that number held at about 75%.
“For a marquee franchise, that’s a high turnover rate,” said Jon Swallen, Kantar Media’s chief research officer. “That suggests that advertisers are relatively less enamored with the Oscars — the franchise isn’t as strong or as durable as it once was.”
Maintaining the appeal of the Academy Awards is crucial to the Academy of Motion Picture Arts and Sciences, which depends on ABC’s ability to sell its advertising time at premium prices.
In 2014, the Beverly Hills organization took in $97.3 million in revenue from its Oscar-related activities, nearly two-thirds of its overall annual revenue, according to the academy’s financial filings.
The lion’s share of the Oscar money came from the license fees paid by ABC parent company Disney for domestic and international TV licensing rights for the telecast.
ABC has broadcast the Oscar show every year since 1976. The network has stitched up the rights to the show through 2020 while its sister division, Buena Vista International, has the foreign broadcast rights through 2020.