CBC/Olympics: Clients get customized package

After standing up the competition with a successful US$20.8-million bid for the 1996 Summer Olympic Games broadcast rights, cbc tv now wants to sit down with advertisers and customize sponsorship packages for them.Peter Kretz, general manager of marketing and sales for...

After standing up the competition with a successful US$20.8-million bid for the 1996 Summer Olympic Games broadcast rights, cbc tv now wants to sit down with advertisers and customize sponsorship packages for them.

Peter Kretz, general manager of marketing and sales for cbc’s English-language television, says such is advertiser interest in the Olympics, to be held in Atlanta, some of them are already phoning the cbc and he has ‘letters of intent to purchase’ sitting on his desk, although he declines to reveal who sent them.

The Olympics run July 19 to Aug. 4, the first time the Summer Games have been held in the eastern part of North America.

Kretz says cbc will sell advertising for the Games in phases.

For Phase 1 – from early May to early June – the public broadcaster has certain contractual obligations with the International Olympic Committee and the Atlanta Committee for the Olympic Games (acog) to negotiate deals with worldwide sponsors such as Coca-Cola, Eastman-Kodak, Visa, Bausch & Lomb, Panasonic, Office Depot, Sara Lee, and others.

Kretz says from early June, cbc will roll out Phase 2, targetting major network advertisers in such categories as automotive, banking and financial services, retail and beer.

He says successive phases after Phase 1 and 2 will sell to regional and local tv markets, adding the cbc also bought basic cable, pay-per-view, satellite tv/dbs, interactive tv, high definition tv and radio rights in English and French for its US$20.8 million (almost $29 million Canadian).

Kretz admits the cbc bought all Canadian broadcast rights because ‘we didn’t want an ambush by another medium.’

He says the cbc’s approach with its advertisers will be to find out just exactly what they would like before designing a package for them.

In explanation, Kretz says the cbc will go back to its clients with a one-document proposal suggesting the number of spots they should buy, added-value and cross-promotion propositions, audience projections and how much it will cost them.

He says cbc’s English-French bid was tightly co-ordinated, so clients can negotiate one campaign for the entire country.

John Cassaday, president and chief executive officer of the CTV Television Network, is not sure the cbc can make any money off the Atlanta Games, given the size of its bid, reckoned to be appreciably more than his own network’s.

Cassaday says ctv bid C$10 million cash for the Games broadcast rights, and gave commitments worth perhaps another C$7 million or more.

Cassaday, noting he needs to be careful about what he says since his remarks could be interpreted as sour grapes, says Toronto-based ctv, unlike the cbc, is a private broadcaster and has to conduct its affairs at a profit.

He says ctv – just coming off a Winter Olympics broadcast from Lillehammer, Norway with good audience numbers and critical kudos – entered a ‘creative, market-oriented bid.’

Cassaday says the Lillehammer Games cost ctv US$12 million all told, and $C$10 million for production.

He says although the final figures have not yet been analyzed, the network was close to breaking even or made a small profit on the broadcast.

Drew Williams, director of marketing at ctv, says there is no doubt the Olympics are a highly prestigious event, but adds, for broadcasters, they are usually reckoned to be break-even or small-loss propositions.

Williams says ctv’s broadcast from Norway did bring the network and its advertisers closer, but, in the end, notes ‘business objectives rule the day,’ referring to the fact that there is no chance an advertiser would pass up the Games simply because they are on cbc and not his network.

Cassaday says the rights to the 1988 Winter Games in Calgary cost $4 million.

Williams says the ioc sought US$800 million from American broadcasters for the Atlanta Olympics, but settled for nbc’s US$456 million.

Kretz says central to cbc’s business plan for the Summer Games are the number of hours the broadcaster intends to air.

He says the English network intends to run 240 hours of live coverage, 80 of it in primetime, with the French network running 188 hours of live coverage, 72 of it in primetime.

As well, Kretz says Newsworld, cbc’s all-news cable operation, will run six to eight hoursa day of recaps and highlights of the Games, although none will be live.

He says there are also radio hours to sell, and adds there is talk of syndicated radio programming.

Because the Olympics are the Olympics, Kretz says the cbc can target almost any audience a client wants, noting many companies use an event such as the Olympic Games for product launches.

He says if the cbc sells 80% to 85% of its air time inventory, the public network will cover its costs, adding, anything beyond that is profit.

He says when the cbc broadcast the 1992 Winter Games from Albertville, France, the network sold 98% of its inventory and could have sold out entirely.

Kretz says the cbc has made money on every Olympics it has ever done.

‘Atlanta, to us, is a good business proposition,’ he says.

Doug Newell, senior vice-president at media buyer Harrison Young Pesonen & Newell in Toronto, says predicting spending is hard, but, nevertheless, he believes the cbc will do well with the Atlanta Games even though it ‘has a steep hill to climb.’

Newell says one problem for the network could be the advertising premium it intends to charge its clients.

He says if hypn has to spend $1.25 or $1.35, where it would usually spend $1, then fair enough, but he adds, too large a premium will land cbc in trouble.

As for his clients, Newell says the obvious candidates for Olympic advertising are in soft drinks, fast food, automotive and travel, for example.

Bruce Grondin, senior vice-president and media director at Young & Rubicam in Toronto, says the agency is keen to see what the cbc has to offer.

Grondin says the Olympics always create advertiser interest, and the network always puts out a good Games product.

He says first up for Olympic consideration will be y&r’s Kodak, Xerox and Ford accounts, with seasonal accounts to follow.

Kodak and Xerox are among the worldwide Games sponsors, and, as such, get first crack in negotiations.

Grondin says Ford of Canada was a major sponsor of the Winter Games in Lillehammer.

Kretz says as well as the opportunity to make money, other factors influenced the cbc’s decision to make the bid it did.

He says with the Olympics, the cbc has the leverage to sell its other programming because they will provide the necessary locomotion.

Furthermore, he says the network wanted the Games to raise its profile in an increasingly crowded – and fragmented – broadcast environment.

Kretz says the Canadian Radio-television and Telecommunications Commission, the federal broadcast regulator, is set to license some or all of the applicants for specialty tv services June 15, and direct broadcast satellite tv is waiting in the wings.

He says the Atlanta Games will be a ‘profile vehicle’ for the cbc for 2 1/2years, and will supply an ‘afterglow’ at their conclusion for another four to six months.

The 1996 Olympics in the Georgia metropolis mark the 100th anniversary of the modern Olympic Games.

The next Winter Games in 1998 will be held in Japan.

In 2000, the Summer Games will be in Melbourne, Australia.