March 13, 2017 / 7:10 PM / 4 months ago

Advertisers bet big on March Madness as live sports ratings wane

3 Min Read

March 13 (Reuters) - The annual NCAA men's basketball tournament is still among the biggest draws on the sports calendar for advertisers looking to get in front of large audiences, even as TV ratings drop for some major U.S. sporting events.

The past 12 months have brought a slew of close finishes for major sports championships. But with the exceptions of the National Basketball Association's Finals last June and Major League Baseball's World Series in the fall, the audiences were not as large as hoped for, underscoring that in today's shifted- viewing environment, live sports are no longer bulletproof.

Even February's Super Bowl, the first to go into overtime, fell victim to the NFL's season-long ratings decline.

That has put more scrutiny on pricey ad buys for big-time sporting events. Yet advertisers are still willing to fork over major dollars to get in front of the events' large audiences, which include young males, among the most-coveted and hardest-to-reach demographic.

The National Collegiate Athletic Association's three-week tournament is the second-largest generator of national TV ad dollars among all U.S. sports' post-seasons, trailing only the NFL.

It also is among the priciest ad buys in television. While CBS Corp and Time Warner’s Turner Sports, which have jointly aired the tournament since 2011, do not comment on ad rates, the price for 30 seconds of airtime during the April 3 National Championship game ranges from $1.2 million to more than $1.5 million, according to three sources with knowledge of negotiations.

Last year's National Championship game averaged around $1.4 million for a 30-second spot, according to ad-tracking firm Kantar Media, and the tournament brought in more than $1.2 billion for CBS and Turner.

But betting big on a major sporting events that under-deliver, especially with rising ad costs, puts marketers in a bind.

"You're not necessarily going to get fired for putting more money on YouTube or more money in Google search, Facebook or even Snapchat at it this point in time," said a media buyer who requested anonymity. "Yet they may question you when you say you’re going to spend $5 million on a Super Bowl spot, or $1.5 on the NCAA tourney and have it fall flat or be an unexciting game or have it underdeliver."

For the entire 2017 tournament, ad rates are up by "mid single-digit increases" according to John Bogusz, executive vice president of sports sales and marketing at CBS.

Some of that is buoyed by the tournament having 19 different corporate sponsors, three more than last year, that have ad buys throughout the tournament.

“We got this major jump start in ad sales, because we have upwards of 60 percent of our advertisers already in,” said Jon Diament, executive vice president for Turner Sports ad sales. (Reporting by Tim Baysinger; Editing by Anna Driver and Dan Grebler)

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