How much money are companies spending on the Olympics? You might not be surprised to see that it's a crazy amount.
One of the Olympics' big spenders is NBC. You'll notice that NBC and channels owned by NBC are the only networks carrying the Olympics. This is because NBC paid a steep price to be able to be the only network to show the Olympics, and they'll be the only network to do so until 2032. In 2011, they paid $4.4 billion for rights until 2018. But, other networks won't get the chance to steal this coverage from NBC. NBC paid $7.65 billion to be able to broadcast the Olympics from 2022-2032.
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NBC isn't the only one spending money, though. They're also raking it in. They had $1.2 billion in ad sales this year, which is a new record. Viewers could definitely tell that NBC was really pushing it with the ads during the opening ceremony.
One ad buyer reported that NBC asked $1 million for space for a single 30 second ad during primetime. Yeah, you saw it right: one million. This is a crazy amount for just 30 seconds, and it's just for TV. Advertisers who want to air ads online will have to cough up even more money. They have to spend $7 to $10 million in TV ads before they can even think about buying digital space.
But for some companies, advertising just isn't enough. There are many companies that are sponsoring the games this year.
McDonald's is probably the biggest sponsor of the Olympics and has been a sponsor since 1976, and the athletes are lovin' it. While it's a smarter move to just buy ad space than to sponsor for some companies, like Nike, sponsoring is a win-win situation for McDonald's. Is there really a better way to advertise than to say that they fuel Olympians? They've signed an agreement to sponsor the Olympics until 2020.
McDonald's is just one of the games' sponsors. Visa is another sponsor. They're such a big sponsor that spectators of the games can only pay in the forms of cash or Visa card. Some of the other sponsors include Omega (who is in charge of all the timekeeping at the games), Coca Cola, Samsung (official means of communication), Bridgestone (provides all tires), Panasonic (provides all TV's, audio/video, and camera equipment), and GE (helps with infrastructure in the hosting city).
The guidelines for Olympic sponsors and non-sponsors are extremely strict. There is a list of words that non-sponsors cannot say, like "Olympian" or even "Team USA."
These restrictions are thanks to Nike in the 1996 Olympics. They ended up getting a bunch of publicity because Michael Johnson, a sprinter, wore a pair of Nikes that they gave him to wear during the race. He then wore the golden Nikes around his neck to compliment his gold medals on the cover of Time Magazine.
Nike got so much promotion from all of this, but they weren't an Olympic sponsor that year. Competing brand Reebok, however, was a sponsor. As you can imagine, they were pretty pissed. They spent $50 million to become a sponsor just to have Nike take the cake.
But, of course, all of the money that these companies spent on advertising and sponsoring means nothing if people aren't watching.
Before the Rio Olympics began this summer, people predicted that ratings would be better than the London Olympics. The slight time difference between Rio and the East Coast was expected to give ratings a boost.
But, the ratings for the Rio Olympics are less than what NBC saw for the London Olympics in 2012. The opening ceremony had a rating of 16.5, the lowest rating since 1992. But, to be fair, this year's opening ceremony had to follow the highest rated opening ceremony ever.
This may not mean that less people are watching the Olympics. It could just mean that less people are watching the Olympics live on TV.
NBC has been streaming most of the events online this summer. In London, NBC streamed 818 million minutes of live events, but Rio had already passed that number by day five of the Olympics.
On the August 9th primetime broadcast, a total of 36.1 million people tuned in (via streaming and cable). But the next night, there was a significant drop: only 28.6 million people watched.
NBC is giving viewers many more options now than it has in the past. But could they be giving viewers too many options? Viewers can tune in to the regular NBC channel, any of the subchannels, or online to see their event of choice.
Of course, we won't know for sure until the games are over and all the data is collected. But for now, it seems like the number of people streaming the games is increasing.
