March Madness Ad Rev Tops $8B Since 2006

New research from Kantar Media shows that the NCAA Division 1 Men’s Basketball tournament is now second only to the NFL playoffs as the most lucrative post-season playoff franchise.

Kantar Media estimates that the annual NCAA Division 1 Men’s Basketball Championship produced a record-setting $1.19 billion of TV ad spending in 2015 and is poised to exceed that amount this year.

The annual collegiate basketball tournament, commonly known as “March Madness,” has evolved into “Marketing Madness.” The NCAA has successfully monetized the sporting event through media rights fees and corporate sponsorship payments while creating a platform for marketers to reap benefits from advertising and promotional programs anchored around the games.

CBS and Turner Broadcasting will again show every game live, with the telecasts spread across the CBS, TBS, TNT and truTV networks. For the first time ever, the championship game will be shown on a cable network (TBS). As in past years, the event will be streamed online, providing advertisers with another outlet to reach viewers. Licensed NCAA marketing partners will also have the opportunity to tightly integrate their products into the tournament through branded placements, experiential events and integrated cross-channel programs.

Editor’s note: All charts shown are from Kantar Media.

Modest Growth In TV Ad Spending

Kantar Media estimates that the men’s basketball tournament produced $1.19 billion of TV ad spending in 2015, a 4.8 percent increase from the prior year. This figure includes pre-game, game and post-game programming, as well as studio shows. During the past few years, annual spending growth has been pacing at 2 to 5 percent with about 90 marketers buying air time per year.

NCAA Men’s Division I Basketball Championship National TV Ad Spending*: 2006-2015

BRAND CONNECTIONS

 

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

Total

Ad Spend (million)

$504

$525

$648

$598

$623

$782

$1,095

$1,117

$1,134

$1,188

$8,215

# of Unique Advertisers

102

125

102

81

83

78

86

89

89

96

279

* includes Pre-Game, Game & Post-Game Programming   

Starting in 2011 every tournament game has been aired nationally, producing more ad inventory and contributing to the revenue increase versus earlier years.

A Leading Post-Season Sports Franchise

As measured by national TV ad spending, the NCAA men’s basketball tournament and the NFL playoffs are perennially the two largest post-season sports franchises.

Post-Season Sports: National TV Ad Spending*

 

2015 (millions)

2014 (millions)

NFL Football (Jan-Feb)

$1,250

$1,233

NCAA Men’s Basketball (Mar-Apr)

$1,188

$1,134

NBA Basketball (Apr-Jun)

$944

$875

Major League Baseball (Sep-Oct)

$415

$378

NCAA Football Bowl Games (Dec-Jan)

$314

$244

* includes Pre-Game, Game & Post-Game Programming

These totals are driven by viewing popularity (which affects ad pricing) and the number of games televised. The number of NFL post-season contests is fixed at 11 and the college basketball tournament is fixed at 67. The other pro sports leagues use “best-of” multi-game series and the total number of games can change from year-to-year, affecting ad revenue trends.

Ad Rates Continue To Rise

The price of a TV spot increases during each round of the tournament and peaks with the championship game. Game telecasts attract larger audiences than studio programming and carry a commensurately higher price. Therefore the average unit cost for an individual advertiser’s package depends on how deep into the tournament it extends and the mix of commercials in studio shows versus game telecasts.

The average price of a :30 unit in the 2015 championship game was $1.56 million, up 5 percent from the previous year.

Average :30 Unit Price NCAA Men’s Division I Basketball Championship: 2005-2014

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

$1.118M

$1.256M

$1.242M

$1.195M

$1.222M

$1.242M

$1.341M

$1.422M

$1.493M

$1.564M

To put the 2015 pricing in perspective, Kantar Media says it was 18 percent less than the AFC/NFC pro football championship games that determined the Super Bowl participants. But it was significantly higher than the College Football Championship game or the most costly air time in other premium sports events.

National TV Ad Pricing For Major Sporting Events: 2015

 

Avg. :30 Price

(in thousands)

NCAA Division I Men’s Basketball Championship Game

 $1,564

National Football League

 

   Super Bowl

$4,400

   AFC & NFC Championship Games

$1,898

 Other Events

 

   College Football Championship Game

$955

   MLB All-Star Game

$625

   NBA Championship Series

$563

   MLB World Series

$500

NCAA Sponsors Dominate Top Ad Buyers

The tournament typically contains TV messages from 85-90 different companies. A small proportion hold dominant positions and each year the top 10 consistently account for more than one-third of total spending. In 2015 this select group invested $444 million to reach NCAA viewers.

2015 NCAA Division I Men’s Basketball Championship: Top 10 Parent Company Advertisers

Rank

Parent Company

Ad Spend* (millions)

# of Units Aired*

NCAA Sponsor

1

General Motors Corp

$93.3

390

Yes

2

AT&T Inc

$75.2

428

Yes

3

Capital One Financial Corp

$44.8

186

Yes

4

Berkshire Hathaway

$41.4

197

 

5

Coca-Cola Co

$40.9

188

Yes

6

Southwest Airlines

$33.7

163

 

7

Samsung Group

$31.2

124

 

8

Nissan Motor Co Ltd

$28.4

133

Yes 

9

Unilever

$27.9

168

Yes

10

Allstate Corp

$27.9

126

Yes

 

Total Top 10

$444.4

2,103

 

The top ten is also notable for the number of NCAA corporate sponsors it includes. Seventeen companies currently have marketing and promotional arrangements with the NCAA and are granted a wide variety of benefits, including certain category exclusivity around the use of NCAA logos, marks, designations and event tickets. CBS and Turner negotiate and manage these financial agreements for the NCAA. All 17 sponsors purchased TV air time in the 2015 basketball tournament and accounted for more than 40 percent of total ad spending.

One Week Wonders: Advertisers Who Go Home Early

The tournament takes place over a period of 21 days and some schools don’t make it past the first weekend. The same can be said for some of the advertisers. Last year 96 different marketers showed up and 16 of them ran spots only during the first week of the event before disappearing. In contrast, 50 of the 96 had activity in all three weeks.

Several of the early departees ran comparatively large schedules and had a notable share of voice during their one week of participation.

2015 Advertisers With Spots Only In First Week of Tournament*

Advertiser

Ad Spend  (millions)

# of Spots

Share of 1st Week Spots

Total, All Week 1 Advertisers

$676.8

4,571

100.0%

Dish Network

$12.0

96

2.1%

Target Discount Dept. Stores

$8.0

110

2.4%

7-11 Stores

$7.7

87

1.9%

* includes Pre-Game, Game & Post-Game Programming.

Several movie studios placed their budgets into a single week of the tournament. These buys were timed to the opening of a theatrical release. Other one-week campaigns included Boeing (corporate promotion), Scotts (early-season lawn care), Miller Beer and Valvoline motor oil.

Automotive Is The Leading Ad Category

Given the share of tournament ad spending connected to NCAA sponsors, the profile of top ad categories is tilted towards their lines of business. Spending by automotive, telecom, restaurant, financial service and insurance marketers was more than one-half of the dollar commitments in the 2015 event.

2015 NCAA Division I Men’s Basketball Championship: Top 5 Ad Categories

Rank

Category

Spend1 (000)

% Of Total $

Leading Advertisers2

1

Automotive

$213.5

18.0%

GM; Infiniti; BMW

2

Telecom

$147.8

12.4%

AT&T; Samsung; Dish Network;

3

Restaurants

$110.9

9.3%

Buffalo Wild Wings; Burger King; Taco Bell

4

Financial Services

$109.9

9.3%

Capital One; Northwestern Mutual; Quicken

5

Insurance

$94.2

8.4%

Geico; Allstate; Nationwide

 

Total Top 5

$681.5

57.3%

 

1. Figures reflect national TV only and include all pre-game, game and post-game programming. 2. NCAA corporate sponsors shown in bold type.

Each of the top 5 categories had multiple sponsors, affirming the desirability of live sporting events to reach their target prospects.

Digital Marketing Opportunities

In addition to advertising on linear TV, the NCAA men’s basketball tournament has ad-supported digital elements that allow marketers to reach consumers on multiple screens.

All of the games are streamed online through the branded March Madness Live service. Fans can access ad-supported video casts, real-time scores, statistics and other related content through web browsers and mobile apps. Streaming access to live games airing on CBS is freely available. Access to video streams on Turner networks requires an authenticated cable or satellite TV subscription.

According to Turner Sports, which manages March Madness Live, the 2015 tournament generated record levels of online consumption:

  • 80.7 million live video streams (+ 17% versus 2014)
  • 17.8 million hours of live video consumption  watched (+19% percent versus 2014)

Advertisers cannot buy the March Madness Live audience by itself. Sales are bundled with linear TV ad packages and many of the TV sponsors do not appear in the online video casts.

As an alternative, some advertisers seek to leverage the popularity of online tournament brackets by placing digital ads adjacent to this content or by sponsoring contests where fans submit bracket entries and compete for prizes. And of course, general sports and news web sites that are destinations for fans seeking scores, schedules and other related content typically get a traffic boost during the basketball tournament and have their own ad monetization strategies.

Corporate Branding Extends Beyond the TV Screen

Beyond the games and related TV coverage, there are on-site branding and experiential marketing opportunities for top-tier NCAA sponsors. These are most prominent during Final Four Weekend when fan attendance (and interest) is at its peak. Reese’s, the official candy partner, is aligned with Final Four Friday where fans can view the teams’ open practices, take part in on-court promotions and watch the Reese’s College All Star Game. The March Madness Music Fest features three days of live performances and is presented by AT&T, Capital One and Coca-Cola. Capital One is also the presenting sponsor of Final Four Fan Fest, a large sports-themed interactive event located near the basketball arena.


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