SBJ/July 2-8, 2012/Olympics

Digital sales now a key facet of NBC’s Olympic ad revenue

While NBC expects to lose money for its second straight Olympic Games, it has sold more than $60 million in digital inventory.

Not surprisingly, the figure represents an all-time high for digital ad sales. But it also showcases how digital is becoming a significant part of NBC’s Olympic revenue and could help the network mitigate losses in future Olympic years.

The Summer Games will be the first time every event will be streamed live online via NBCOlympics.com. NBC’s ad sales are reaping the benefits of that added online programming.

NBC Sports Group’s Seth Winter says London digital sales are more than double Beijing.
Photo by: NBC
The $60 million figure has helped the network achieve record-high ad revenue around the Games. During the Beijing Games four years ago, NBC brought in $24 million in digital ad sales, which represented just 3 percent of the total $850 million in ad sales. Digital sales this year account for 6 percent of the $950 million in ad sales that NBC has booked, said Seth Winter, NBC Sports Group’s executive vice president of sales and marketing.

“Digital sales are more than double versus Beijing,” Winter said.

NBC’s record digital ad revenue does not surprise industry experts, like BTIG analyst Rich Greenfield, who describes the market as being in its infancy with a lot of room to grow.

“We’re still very, very early in the digital ad sales business,” Greenfield said. “The Olympics is something where you can see more digital activity.”

NBC’s total sales figure of $950 million for this year’s Games shows that NBC has sold $50 million worth of Olympic ads in the past 4 1/2 months. In February, the network said its revenue was at $900 million (SportsBusiness Journal, Feb. 13-19 issue).

NBC is not selling digital ads on its own; it is packaging digital ads with TV sales.

“If you buy our digital media, you have to invest in all of the platforms that we distribute our Olympic content on,” Winter said.

NBC’s digital performance is important, considering that NBC executives have been hinting that they expect to lose money on the London Games on top of the $220 million the network lost from the Vancouver Games.

“We don’t necessarily expect that they will be profitable,” NBC Sports Group Chairman Mark Lazarus told a press conference last week. “We will have an improved financial position over the plan that was inherited at the time of the merger over a year ago.”

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