Amid the current crisis, advertisers and NBC Universal are hustling to reorganize and reschedule the more than $1.25 billion in ad spend for the 2020 Olympic Games. Ads for the Olympic Games are something companies spend many months—and sometimes years—developing and cannot be as easily shifted due to the fact that their content is specially tailored to the games.
Last Tuesday, the Japanese Prime Minister, Abe Shinzo, and the International Olympic Committee (IOC) agreed to postpone the Olympic Games to 2021 to safeguard the wellbeing of both the athletes and general public.
According to Adweek, more than 90% of NBC Universal's media inventory was sold out before the games were postponed. Unfortunately, though, the record-breaking $1.25 billion invested in advertising during the games is now in jeopardy. NBC may have difficulty negotiating and compensating advertisers with ad space since there is less available advertising time in the fall due to the presidential elections, states an article in the Los Angeles Times.
On top of that, advertisers are seeing the current situation as a potential monetary safety net if things go awry at their companies.
“’My guess is most [advertisers] will take the opportunity to take [the money] back and either put it to the bottom line or use for a rainy day,' said one agency executive,” according to Digiday.
If advertisers do indeed start pulling their dollars, that’s not good news for NBC Universal, who greatly relies on the revenue generated from advertising during special events like the Olympics.
Despite the uncertainty and present turmoil, there is hope that things will turn around. Media executives remain optimistic that while there won’t be any profit this year, that the 2020 Olympic Games will still happen in 2021.
“These are extraordinary and unprecedented times, and we fully support the IOC’s decision to step up its scenario-planning for the Tokyo Olympics. We are prepared to stand behind any decision made by the IOC, the Japanese government, and the world health officials with whom they are working regarding the Tokyo Olympics.” – NBC Sports
