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Oscar Ad Prices Hit All-Time High as ABC Sells Out 2014 Telecast (EXCLUSIVE)

Demand for must-see live events that drive social media fuels brisk sales

Madison Avenue is placing new importance on the Oscars.

ABC has sold out its advertising inventory for its March 2 broadcast of the Academy Awards, according to media buyers and other people familiar with negotiations for the event, and has been seeking what appear to be record prices. Ad buyers said the network has sought between $1.8 million and $1.9 million for a 30-second ad berth for the kudocast hosted by Ellen DeGeneres.

Those figures would establish a new benchmark for Oscar ad coin. For this year’s telecast, ABC sought between $1.65 million and $1.8 million for a 30-second commercial. The previous high price for a commercial slot in the broadcast is $1.82 million in 2008. After that year, a recession and ratings stumbles tamped down demand for the glitzy showcase, which commanded only around $1.3 million for a 30-second slot in 2009.

Demand by advertisers for the event has been growing in the past two years. ABC worked until just before Christmas in 2012 to sell out inventory for the 2013 broadcast. But the 2014 appears to have hit the sell out point a few weeks ago, according to one person familiar with the pace of sales. ABC declined to make executives available for comment. The 2012 telecast generated around $82.1 million in ad spending, according to Kantar Media.

Even though ratings for the Oscarcast tend to ebb and flow according the box office power of best-picture nominees, the Academy Awards appear to be benefiting from the new power marketers accord to live events such as the Super Bowl and other sports broadcasts. At a time when viewers have dozens of video choices from TVs, video game consoles, mobile devices and streaming-video sites, the number of events that can offer sponsors a large, unified audience are dwindling.

What’s more, viewers equipped with digital video recorders can’t zap past the commercials in a live show – a dynamic which lends the event more appeal. And the social media frenzy that erupts around big-ticket live telecasts such as the Super Bowl and awards shows adds an entirely new dimension for marketers.

Like the NFL does with the Super Bowl, the Academy of Motion Picture Arts and Sciences limits the amount of advertising allowed to run with the Oscars broadcast. The show averages between nine and 10 minutes of national ad messages per hour, according to Kantar. By contrast, the Grammy Awards have run with as much 14 minutes per hour.

Ratings may be giving the ad price for the show a boost. This year’s Oscars, hosted by Seth MacFarlane, attracted an average viewership of 40.3 million viewers, according to Nielsen,an increase of about 3% from the 39.3 million who tuned in to see Billy Crystal host in 2012. More telling: The 2013 event notched a 20% increase among viewers between the ages of 18 and 49, the demographic most coveted by advertisers and a likely factor in the rise in ad costs for 2014.

Whether or not the ad prices stay at current levels remains to be seen, and is probably still dependent on the nominations mix in any given year. When the top movies nominated are arty films aimed at older audiences, viewership typically slumps. When the nominees for best films are blockbusters, the ratings increase.

In 1998, for example, approximately 55 million viewers tuned in to see the crowd-pleasing “Titanic” win Best Picture. Yet in 2003, when “Chicago” won the top honor, only 33 million watched. Oscar ratings hit a new low in 2008, when just 32 million tuned in to see “No Country For Old Men” win the big prize, down from about 38.9 million the year before.

To help combat the problem, the Acad has allowed for a wider field for best-pic candidates, offering room to as many as 10 nominees.

There is some speculation that Hyundai Motor – which has been the exclusive auto sponsor of the Oscars since 2009 – may have dropped out of the event, according to one person familiar with the situation. A spokesman for the automaker did not respond to an email seeking comment. Other prominent Oscars sponsors in recent years have included J.C. Penney, Coca-Cola, American Express and McDonald’s.

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