NBC (NSDQ: CMCSA) Sports sold $25 million in digital advertising for the 2008 Beijing Olympics — and has more than doubled the amount for the London Games with months to go before the 17-day marquee event, paidContent has learned.
The more than $50 million in digital sales represents at least 5.5 percent of the $900 million in advertising NBC Sports already has sold for London. The percentage is also up from Bejing, when digital represented 3 percent of the total take.
It’s not a vast amount but as one exec told me: “It’s real money.” That means it can no longer be dismissed as incidental or only marginally meaningful — a message that has not been lost at Comcast-operated NBC Universal.
By comparison, CBS (NYSE: CBS) brought in roughly $100 million in digital revenue for March Madness from 2007-2010, with sales increasing annually as the online event grew.
Why the uptick? Execs at NBC Sports attribute the increase to several factors, including the decision to put more than 3,000 hours of video from London online. NBC Sports is still a couple of months away from announcing what events will be live online but Mark Lazarus, who succeeded Dick Ebersol as head of NBC Sports Group, already has promised all events will be aired live online or on TV.
Under Ebersol and former NBCU CEO Jeff Zucker, NBC remained TV-centric, holding back video of some events even when the results — and often, the footage — were available. NBC Sports eventually started to provide coverage of results online but continued to hold back on some video to the frustration of online users (self included).
This version of NBC Sports will treat online video more like TV in other ways, including the ability to release more inventory during the Olympics if the demand is there.
[Keep in mind: Some users are still bound to be frustrated if they don't subscribe to multichannel TV. More video online and more live events on TV doesn't mean everyone will have access to everything. NBC Sports has yet to spell it out but some content will only be available to video subscribers via authentication. My hope is that Comcast will leave NBC itself outside of any authentication plans.]
As part of the increased streaming commitment, reported earlier this week by SBJ, NBC Sports is also shifting video technology and promotional partners to YouTube (NSDQ: GOOG) from Microsoft (NSDQ: MSFT). Instead of Silverlight, NBC will use a co-branded version of YouTube’s video player. Instead of a syndication deal that allowed MSN.com also to show Olympic video, YouTube will promote the heck out of Olympic video from its front page and across the video hub but will direct all traffic to NBCOlympics.com.
Rick Cordella, VP/GM of NBC Sports and Olympics Digital, tells me reports that YouTube will be streaming official video as well are inaccurate. Some of that was fueled by a mistake on the NBC Sports advertising microsite that since has been corrected. It may sound like a small thing but it’s important to NBCU, which relies on its cable deals and affiliates, that YouTube not be perceived as a video partner. “All London Olympic video will live on nbcolympics.com,” Cordella said.
The switch is a lot more about demographics than technology. NBCU wants to increase the streams it serves and lower the age of the audience it reaches for the Olympics. YouTube already draws that kind of audience. With YouTube’s promotion hose turned on London, Cordella predicts “we will be able to move those demographics to the Olympics.”
According to its advertising kit (citing Nielsen), YouTube reaches 62 percent of U.S. males between 18-24 and 61 percent of all U.S. men between 18-34, as well as 58 percent of U.S. women 18-34. Users tend to be active, engaged and many of them like to share. Cordella is counting on all that to help NBCU expand its reach for the Olympics — which, in turn, will move that digital ad needle up.
While Cordella didn’t want to go into details, my understanding is the basic deal is a barter but NBCU would have to pay YouTube if certain metrics are surpassed. No revenue sharing is involved and NBC Sports retains control over ad sales.
NBC also has enhanced the technology it can offer advertisers during the Olympics by moving to ad insertion, which wasn’t available for Beijing. Instead of mirroring TV pods during streams, ads can be inserted to match the medium and device. That means that NBC Sports can serve up different ads from the same advertisers for a tablet user and a TV viewer at the same time, for instance.