ABC sells out of ad time for Oscars

Price for 30-second spots climbs from last year. Firms brace for political speeches.

ABC Television network is collecting about $2 million for each 30-second ad spot in the upcoming 89th Academy Awards broadcast — a healthy boost over last year’s prices.

Burbank-based ABC, a unit of Walt Disney Co., said Friday that it had sold all its commercial inventory for the Feb. 26 awards gala at the Dolby Theatre in Hollywood. The program will be hosted by ABC comedian Jimmy Kimmel.

Last year, the show was mired in controversy because of the lack of diversity among the award nominees. In 2016, ABC sold its ad inventory for an average of $1.72 million per 30-second spot, according to a survey of advertising buyers by Kantar Media, which tracks spending. Various factors could account for the increase in ad spending this year, including changes in the advertising market.

ABC’s rate increase comes as advertisers scramble to buy time in shows that

will be watched live, which is becoming increasingly important at a time when consumers actively seek out ways to avoid commercials.

Additionally, clouds over the Oscar telecast lifted last month when the Academy of Motion Picture Arts and Sciences voted for a diverse slate of nominees for this year’s show. But there is a potential for another Oscar flap because of highly charged emotions in Hollywood over the election of President Trump.

“We will have diversity of a different kind this year: The conversation won’t be about racial diversity but diversity of political points of view,” said Jon Swallen, chief research officer for Kantar Media.

Political themes punctuated last Sunday’s Grammys music award show on CBS. And at the Golden Globes award ceremony on NBC in January, actress Meryl Streep sparked Trump’s ire when she used her acceptance speech to skewer his conduct, particularly when he mocked a disabled reporter while on the campaign trail.

Some Oscar advertisers, who bought their spots months ago, might be bracing for a furor over politics, particularly if conservatives decide to tune out. But if the Grammys were any indication, this year’s Oscar ratings could be higher than last year when the Academy Awards broadcast attracted 34.4 million viewers, an eight-year low.

“Trump has been very good for television,” said Ashwin Navin, chief executive of Samba TV, a data and analytics firm. “The politically charged environment has been good for television, including these award shows.”

Samba TV analyzed the audience for the Grammys and found that about half the 26 million viewers who tuned in didn’t watch the show last year. Navin said the new audience largely came from younger viewers.

“There is a replacement of the audience going on, and this new base of viewers is paying attention to these issues,” Navin said. “People really care about what Meryl Streep says.”

ABC advertising executives were unavailable to comment.

The network sold the bulk of its Oscars ad time in the fourth quarter of last year and early January, according to a person familiar with the ad sales who was not authorized to speak publicly. Many of the advertisers who bought time in the show made their decision last fall — before the November elections.

“The ad time is sold so far in advance, often long before these topical issues come up,” Swallen said.

But the prospect of political acceptance speeches didn’t seem to dampen ad sales. In recent weeks, as the ad inventory grew scarce, ABC sold its last few spots for as much as $2.5 million, the knowledgeable person said. Numerous repeat advertisers will make an appearance this year, including American Express, McDonalds, General Motors, Samsung, Revlon, Geico and AARP.

For advertisers, the Oscars attract a particularly affluent audience — catnip for marketers who hope that the glamour of the program will rub off on their products.

“It’s a large audience, a live audience and an aff luent one — and those are the things that really drive pricing,” Swallen said.

Women tune in to see the celebrities and the fashion. It also helps that ABC and the academy have focused on Oscar programming for the second screen because many viewers want to follow the conversation on social media while they are watching the live broadcast.

In 2016, ABC generated about $115 million in revenue for the award show and the red carpet program that proceeded it, according to Kantar Media. That was down from 2015, when ABC raked in nearly $125 million from advertising sales.

The money is important because it represents the largest source of revenue for the Beverly Hills-based academy, which has worked hard in recent years to add younger and more diverse members to the group. The academy separately receives money for the international distribution for the show, which another unit of Disney handles.

And even if the jokes and acceptance speeches get political, that might not be a turnoff for a large swath of the audience.

“The audience for the show skews much more from urban areas,” Swallen said.

That means much of the viewership comes from metropolitan regions that leaned more toward Hillary Clinton than Trump.

‘We will have diversity of a different kind this year ... political points of view.’ — Jon Swallen, chief research officer for Kantar Media