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ABC Presses For Record High Prices For Oscar Ads (EXCLUSIVE)

Some advertisers are willing to pay a new high for a big annual TV event that experienced a recent low.

Ratings for ABC’s 2015 broadcast of the annual Oscars ceremonies fell nearly 15% in 2015. And yet,the Walt Disney-owned network is moving toward selling out its coming 2016 broadcast of the event,  pressing potential buyers of its remaining inventory for as much as $2.2 million for a 30-second commercial in the show – a new record price – according to media buyers and other executives familiar with the negotiations. Advertisers who bought into the glitzy awards show earlier in the year were asked to pay between $1.8 million and $2 million for a half-minute spot, these people said.

ABC declined to make executives available for comment. The network sought $1.9 million to $2 million for the bulk of the 30-second commercials that ran in this year’s broadcast, which was hosted by Neil Patrick Harris. For some, the price of pitching one of TV’s biggest audiences just rose between 5% and 16%.

The network’s push for higher prices may come as a surprise. The total audience for the Harris-hosted broadcast slumped to about 37.3 million from 43.7 million – the lowest tally for Hollywood’s most important night since 2010.

As more couch potatoes move from the old-school TV screen to the ones attached to smartphones and tablets, however, ad buyers said Madison Avenue is focused more on quality and less on quantity. Sponsors are more willing to pay for the large crowd that watches the Oscars -and the commercials that accompany the show – live than they are concerned about the churn of audience from year to year.

To be sure, advertisers still depend on TV to deliver media’s biggest and broadest audiences. But in the past two years, they have demonstrated a willingness to earmark more dollars for a subset of viewers who would be more likely to buy their particular product or more open to hearing their promotions. Chalk the new attitude up to a wide array of new data being collated from set-top boxes, digital activity and consumer shopping patterns. Advertisers know they can determine the number of viewers who watch a particular program, as well as their gender and age group.  Yet in 2015, they are clamoring to find out which shows lure first-time car buyers, yogurt fans and families with a new baby on the way – and that qualitative appeal can sometimes win more sponsor attention.

Oscars ratings typically hinge on the mix of nominations in any given year. When the top movies nominated are arty films aimed at older audiences, viewership often slumps. When the nominees for best films are blockbusters, the ratings increase. In 1998, approximately 55 million viewers tuned in to see the crowd-pleasing “Titanic” win Best Picture. 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.

There are other factors behind the Oscars’ ability to command higher prices. The Academy of Motion Pictures and Sciences limits the amount of advertising time allowed in the awards broadcast, In 2014, for example, the Oscars broadcast on ABC contained about 11 minutes’ worth of advertising per hour, according to ad-tracker Kantar Media. In contrast, the Grammys, broadcast on CBS, and the Golden Globes, covered by NBC, have contained about 14.5 minutes of ads per hour in that year. Regular primetime shows usually run with about 14 to 16 minutes of national ads per hour, according to Kantar.

ABC’s ability to nab higher prices for its Oscars broadcast comes not too long after the network ran into headwinds. Ad prices in 2009 and 2010 fell as low as $1.3 million to $1.5 million for 30 seconds, as the nation slowly rebounded from a crippling recession. Oscars ads hit a previous high of $1.82 million for a 30-second slot in 2008.

The next Oscars program will be co-produced by film director and producer Reginald Hudlin and David Hill, the TV veteran who enjoyed a long career at 21st Century Fox. The executives have suggested they might be open to having a pair of hosts when ABC broadcasts the 88th annual event on February 28, 2016.  Craig Zadan and Neil Meron, who produced the last three broadcasts, have moved on after their contract with the Academy ended.

AT&T, McDonalds, Anheuser-Busch InBev, Netflix, Comcast, Walt Disney, Sprint and Samsung were among the Oscars sponsors in 2015. Coca-Cola, which sat out the 2014 telecast only to see rival Pepsi take its place, returned in the most recent ceremony.

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