$1.5 Million is the top tier asking prices for an ad in the April NCAA Men’s Division 1 Championship game on CBS this year. The Championship’s not in March, but is spending that much for a single TV spot madness?
Having just committed to investing $10.8 Billion over the next 14 years with its partner Turner Broadcasting, CBS needs to recoup its investment. With commercial time during the NCAA men's college basketball tournament close to being sold out, it looks as if they will see a healthy return. But does this equate to value for advertisers?
Let’s take a look at the Championship Game. As you can see from the data below, while the number of National Advertisers has dropped, the Ad Spend has nearly doubled over the last 10 years
In fact, NCAA Men’s Basketball is second only to the NFL for post-season spending.
The franchise consistently brings in more money than the post-season playoffs for Major League Baseball, the National Basketball Association or college football.
Not surprisingly, with that many dollars chasing the NCAA inventory, only the Super Bowl commands higher post season sports pricing.
So what does an advertiser get for their investment? Let’s take a look at the ratings from games aired on CBS:
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NCAA MEN'S BASKETBALL CHAMPIONSHIP GAME
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NIELSEN RATINGS TREND ON CBS
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HH RTG
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2010
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Duke-Butler
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14.2
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2009
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North Carolina-Michigan State
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10.8
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2008
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Kansas-Memphis
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12.1
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2007
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Florida-Ohio State
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12.2
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2006
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Florida-UCLA
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11.2
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2005
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North Carolina-Illinois
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15
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2004
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Connecticut-Georgia Tech
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11
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2003
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Syracuse-Kansas
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12.7
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2002
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Maryland-Indiana
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15
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2001
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Duke-Arizona
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15.6
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Using Kantar’s cost estimates and Nielsen ratings data, we can see that in 2010 advertisers were spending around $86,000 per rating point on CBS. So was this a good deal? Let’s take look at similar cost per rating point (CPP) data for other franchises post season in 2010
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2010 NFL CHAMPIONSHIP
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NETWORK
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Game
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HH RTG
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Est. $:30
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Est.CPP
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CBS
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Colts/Jets
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26.3
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$ 1,270,000
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$ 48,289
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FOX
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Saints/Vikings
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30.6
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$ 1,270,000
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$ 41,503
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FOX
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Saints/Colts
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46
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$ 2,974,000
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$ 64,652
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2010 NCAA CHAMPIONSHIP
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CBS
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Duke /Butler
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14.2
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$ 1,222,000
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$ .86,056
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Last year, advertisers were willing to pay a premium over much higher rated NFL games, making the NCAA Championships one of the most expensive vehicles on television.
In the real world, however, few advertisers will actually pay $1.5 Million for one 30.second commercial. The vast majority of sales are tournament packages, and not just Championship placements. This year these include not just CBS, but also TBS and TNN, as well as digital broadcasts on Tru TV.
So are these significant investments worthwhile?
Well, price and CPP are all just inputs, no matter how high. Fortunately for CBS and Turner value is determined by outcomes, not just inputs. NCAA sponsors will judge value based on business, brand or behavioral outcomes, and balance the value of those outcomes against the cost of their NCAA investments. Today we live in a world where analytics strategy is part and parcel of any media strategy. It has to be, otherwise advertisers would be flying blind. At $1.5 Million, very few can afford that luxury.