With the promise of a large, demographically diverse audience, Kantar forecasts that the Tokyo Olympics could reach $2.25 billion in U.S. ad revenue for the live broadcast – more than 20% higher than the 2016 Summer Games and an all-time high.
However, the size and enthusiasm of the Olympic audience remains to be seen. Kantar Sports MONITOR has found that despite the postponement from last year, 63% of the US population is interested in watching what is still being called the 2020 Tokyo Olympics. Yet 53% of US consumers agree the games should be postponed or cancelled, according to an Express Survey conducted on Kantar Marketplace late last month.
Given this uncertainty, brands who are advertising during or sponsoring the Games will need to exercise caution. Many Olympic sponsors are hastily adjusting to the ever-changing narrative around the Tokyo Olympics. Brands are concerned about optics, and need to carefully adjust the tonality of their communication, keeping in mind that in much of the world, consumers are stressed, angry and less hopeful due to the pandemic.
Sport’s biggest ad contest
With many days of prime-time coverage, a broad range of sports and a global stage, the Olympics provides a unique advertising opportunity. NBC has broadcast the event since 1988, attracting advertisers from every sector interested in negotiating substantial packages.
The Summer Olympics, especially, has been a cornerstone event, with its larger range of country participants and more popular games increasing viewership. While brands are expected to cautiously navigate the concerns of COVID surrounding the Olympics, the games remain an enormous tent pole event that can significantly stimulate a brand’s rebound in second half. The benefits of such an event should outweigh the risks for many brands looking to build momentum in their recovery strategy.
This dynamic has been reflected in each of the last two summer events, with each achieving new highs in revenue. And if the trend continues, TV ad revenue for the 2021 Summer Olympics in Tokyo will exceed $2 billion. (Digital and streaming viewing as well as ad spend are also growing, but broadcast television continues to make up the majority of spend.) The postponement of the Games to 2021 may result in some reductions to this spend, but major declines seem unlikely. First, much of this ad spend was already committed prior to the pandemic, with NBC stating it had already sold $1.25 billion in advertising by March 2020. Second, event sponsors like Coke, Visa and P&G have continued their support for the IOC and the Games.
These advantages have helped the Olympics remain the single most valuable sporting event for broadcast networks. (While ad rates are much higher for the Super Bowl, far less inventory is available for the one-night event, which reached $485 million in ad revenue this year.) In the two weeks from Opening to Closing Ceremony, the Olympics generates 10% to 15% of total annual Sports revenue across all broadcast networks. This includes Baseball, Basketball, Football, Hockey, Tennis and all of other major broadcast events. The sheer size and importance of the Olympics is unmatched in the sports genre.
A broad range of advertisers contribute to the Olympics’ billions of dollars in spend, with Automotive, Communications and Financial amongst the highest spenders. Interestingly, the Insurance and Motion Picture categories scaled back their presence during the 2018 Olympics, only to be filled by Electronics and Restaurants. Meanwhile, several of these categories – including Travel & Hospitality, Motion Pictures and Restaurants – reduced ad spend significantly in 2020 due to the pandemic. These sectors could double down on spend this year as they look to lure consumers back. However, it remains to be seen how enthusiastic fans will be about this year’s unique Olympic games.
Will a lack of fans impact interest and viewership?
One factor that could play a significant role in fan enthusiasm is the lack of spectators at this year’s Games. As Japan is currently in a state of emergency because of worsening COVID-19 conditions, it was recently announced that most events in the 2020 Tokyo Olympics will be played without any spectators. If recent history in sports media is any guide, it’s a development that is likely to put a damper upon fan engagement with the Games.
In August 2020, Kantar Sports MONITOR surveyed the impact of the COVID-19 pandemic upon interest in sports fandom after most sports leagues were on hiatus from March until June 2020. It found that nearly two-thirds of U.S sports fans (64%) found watching sports to be “less enjoyable” since its return – which was reinforced by the significant declines in sports TV viewership experienced across virtually every major sport in 2020.
When Kantar Sports MONITOR explored the reasons why these fans found the return of sports to be less enjoyable than before the shutdown, reasons given ranged from the additional stress associated with COVID-19, the impact of social justice protests, and new rule changes certain leagues introduced. But the top two reasons were “It’s not as fun without fans in the arena or stadiums” (85%) and “something is ‘off’ or weird about watching the games” (76%). It’s clear that the simple presence of fellow fans cheering on their favorite teams and athletes plays a meaningful role the enjoyment people derive from watching sports.
Now, more than a year after COVID-19 disrupted the sports industry, fans are returning to arenas across the country and sports TV ratings have largely rebounded, too. It’s possible that with improving COVID-19 conditions in the US, extra year of anticipation for the Olympics, and evolutions in sports broadcasting during the pandemic, viewers of the Tokyo Games will be unfazed by the lack of fans in the stands. But based upon Kantar Sports MONITOR’s research, the impact of fans upon the viewing experience should not be underestimated.
Preliminary interest in the 2020 Tokyo Summer Olympics is high
Despite the challenges of engaging fans without spectators in the stands and setting the right tone amidst a global, unevenly distributed pandemic, sponsors of the Summer Olympics should be comforted that it remains a highly anticipated event. Of 33 sporting events measured by Kantar Sports MONITOR, the Summer Olympics is ranked behind only the crown jewel of events in American life – the NFL’s Super Bowl – in terms of its appeal among sports fans. Just 27% indicated they had no opinion or didn’t care about The Summer Olympics meaning that roughly three-fourths (73%) of the U.S. audience 12+ has interest in tuning in at one point over the span of the event.
Beyond the event’s overall appeal and in spite of all of the challenges, Americans’ interest in the Tokyo Olympics appears high. When asked to compare their interest in the Tokyo Olympics with their interest in past Games in a mid-May Kantar Sports MONITOR survey, 40% of American adult sports fans said they were looking forward to it more while just 8% indicated they were looking forward to it less (the remainder, 52%, said there was no difference with the past). And when asked about their viewing intentions in a late-June Express Survey on Kantar Marketplace, nearly half (48%) of Americans indicated they’d watch “as much as I can” or “a lot,” more than two times the amount who indicated they expected to watch “not very much” or “not at all” (18%).
These results may indicate that enthusiasm is building as the Games get closer. It’s also likely that, as with other sports, NBC and Olympics organizers to come up with new ways to continue to make the games seem fun and exciting despite the lack of live audiences. Despite undeniable challenges, the Olympics thus remain an important opportunity for brands to connect with mass consumer audiences.
Best practices for advertisers: Think positive
Indeed, a significant share of consumers remain highly engaged with sports: Kantar’s recent Express Survey found that 43% of consumers are more likely to purchase a brand that sponsors a favorite athlete. Striking the right balance and correct tone will however be absolutely essential for advertisers this August. To determine the messaging and attributes that would be most likely to succeed, Kantar tested a selection of recent Olympics-related television ads using Link AI, a cutting-edge artificial intelligence solution for predicting consumer response in real-time.
The AI-powered analysis showed that ads which are positive and focused on the future consistently performed better – a change from trends seen earlier in the pandemic and one that matches US consumers’ desire to embrace recovery. Ads honoring those who are positively changing the world (typically by depicting inspiring Olympic moments), performed in the top 30% of the Kantar database. Meanwhile, ads portraying the Olympics as a sign of moving forward also performed very well on both breakthrough potential and driving long-term brand impact, again highlighting the importance of being responsive to current consumer needs.
Kantar’s Marketing ROI analytics and creative analysis clearly demonstrate that taking a practical and positive stance will allow sponsors to still drive great return off the significant sponsorship investment of the Tokyo Olympics. Regular testing of ad creative – even those that were successful in the past – will also be critical to ensure that brands are resonating with consumers during a time of unprecedented change.