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AMONG LE records broken at the Tokyo Olympics, one was not celebrated: the games were the least watched in decades. In America, only 15.5 million people connected each night, the least since CNBUniversal, now part of Comcast’s cable empire, began covering the event in 1988. Audiences were 42% lower than Rio games in 2016. Broadcasters in Europe saw declines similar. Brands that had paid to advertise alongside the jamboree complained. CNB scrambled to offer them free seats to compensate for the lack of audience. Yet the Olympics illustrated an advertising puzzle. Even while the audience is deserted TV, brands are paying more than ever for ads.
Tokyo was an uneven playing field. Many events took place while Americans and Europeans slept. Stars such as Simone Biles and Naomi Osaka left some events early. Covid-19 meant no onlookers and face masks all around. But the collapse of the audience was not punctual. The Tokyo opening ceremony was watched by 36% fewer Americans on that day than Rio in 2016. Rio’s audience was 35% lower than in London in 2012.
While the viewers were gone, the advertisers stayed. CNB sold over $ 1.2 billion worth of ads for Tokyo, about as much as Rio. Even after running the compensatory ads, he expects to make a profit on the roughly $ 1 billion he paid for the television rights to the games. He’s also been successful, in the words of his boss, Jeff Shell, in using them “like a fire hose to promote everything we do in the business,” especially his streaming service, Peacock, which has made it bigger. application. store graphics.
The games illustrate a larger trend. This year, the average American will watch 172 minutes of programming and cable TV per day, 100 minutes less than a decade ago, estimates eMarketer, a research firm. Among the “money demographics” of 18 to 49 year olds, viewership numbers halved as audiences went online. Even so, the expenses TV ads is remarkably stable. In 2021, brands will spend $ 66 billion on U.S. ads, about as much as every year over the past decade.
TV remains “the worst form of advertising, except all the others,” says Brian Wieser of GroupM, the world’s largest ad buyer. Big streamers, like Netflix and Disney +, are ad-free areas. Brands are wary of user-generated content on YouTube. And ad-supported streamers like Peacock and Disney’s Hulu still lack enough ad space to move big marketing budgets. As a result, advertisers continue to invest money in television even as returns decline.
Maybe not for long. YouTube is making inroads into branded advertising as its mix of content becomes more professional. Amazon is expected to run ads on its National Football League coverage next year. By combining premium content with targeted advertising, the e-empire will unlock “huge buckets” of advertising dollars, predicts eMarketer’s Andrew Lipsman. In 2019, advertising on streaming services in America was only worth 9% as much as ads on cable and broadcast TV, says eMarketer. In 2023, this figure will be 32%.
Where will that leave events like the Olympics? Probably still on the podium. Advertising money will be used up during the day and some prime time TV, thinks Mr. Lipsman. But big live shows will be more desirable than ever. “There is nothing more powerful in the media than the 17 consecutive days of Olympic domination,” summed up CNBthe athletic director of Pete Bevacqua. Like in sports, it doesn’t matter if you aren’t as good as you used to be, as long as you beat the competition. ■
This article appeared in the Business section of the print edition under the headline “The Loser Takes It All”
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