The slashing of marketing budgets by big spenders on Madison Avenue already has hit Hollywood pretty hard. But the biz should brace itself to feel the brunt of reduced spending this year.
The Oscars, long a favorite for major advertisers, generated $72 million for ABC this year, down from $81 million last year, TNS Media Intelligence reported.
The web sold 26 minutes of ad time during the kudocast. It filled six minutes and 20 seconds with network promos, the most since 2006.
The tough economy forced ABC to charge $1.4 million per 30-second spot in an effort to sell the inventory. That’s comparably less than the $1.7 million it brought in last year per spot.
The reason is this year’s show saw heavyhitters like General Motors and L’Oreal ankle for the first time. They’d been Oscar’s biggest buyers in the past.
In fact, GM had spent the most — $105 million over the past decade to promote its vehicles during the show.
Departure created an opportunity for other companies like Hyundai, Coca-Cola and JC Penney, who each had eight spots, as well as Audi, Sprint Nextel, Bristol-Myers Squibb, Hoover and Maytag to take over the time to promote their own brands at a cheaper price.
Disney and Paramount also pushed their pics during the show; this was the first time pics could be promoted during the broadcast.
But the Academy Awards could be a sign of things to come.
Procter & Gamble has hinted that it will slash spending by as much as $80 million, with much of that currently going to television.
This week, GM, the nation’s biggest automaker, disclosed that it would slash $800 million from its North American marketing budget in 2009, due to devastatingly slow sales. This week it reported a net loss of nearly $31 billion for 2008.
Troubled automaker is seeking billions in federal bailout funding and is now close to bankruptcy, forcing the company to carefully reconsider all of the marketing dollars it doles out.
Earlier plans had called for GM to cut $600 million in marketing by 2012, but a worsening economy forced it to hasten cutbacks.
Ironically, move comes months before GM’s cars and trucks are prominently featured as the shape-shifting stars of “Transformers: Revenge of the Fallen” that Paramount will distrib this summer. Original 2007 blockbuster was essentially considered a glorified infomercial for the automaker and its vehicles’ roles as the heroic ‘bots is even bigger in the sequel.
Considering its financial woes, automaker isn’t likely to spend any marketing dollars to promote its tie-in with the pic, however.
Without the General’s dollars in the overall ad mix, television networks could face a serious problem this May when they roll out their new fall slate for marketers.
Media buyers may be interested in the new crop of programs, but they may just not have the money to buy time in those series.
Analysts like Jack Myers already anticipate TV ad buying will drop by as much as 15% and that there will be no media turnaround until mid-2010. He expects overall U.S. advertising to drop as much as 10% this year.
On the bright side, ABC’s tally for this year’s Academy Awards still bested the show’s 2004 broadcast.
“This year’s tumultuous economic climate was both a boon and a bane to ABC’s Academy Awards telecast,” said Dean DeBiase, CEO of TNS Media Intelligence. “While several major advertisers dropped out of this year’s event, it allowed new brands to participate. Despite a challenging business climate and an overall downward trend in audience ratings, marketers understand the unique power of TV advertising for marquee events such as the Academy Awards.”