• by Wayne Friedman , August 13, 2008

A few days into the Beijing Olympics, NBC is doing something that is rare for any network: It's over-delivering on its ratings promises to TV advertisers.

So far, the games have delivered big numbers in prime time--starting with the Opening Ceremonies on Friday night, where NBC's results rocketed to a Nielsen Media Research 18.8 rating/34 share. It took a decided dip the next night--Saturday--which reported a 13.9/27. Sunday was back up to an 18.1/31. Monday offered up an equally solid 17.8/28.

All that averages to a 17.2/30, which is about two-and-three-quarters rating points ahead of promises made to TV advertisers. NBC had been offering a 14.5 average rating in prime time, according to several media agency executives.

"Most large deals have guarantees," says one media agency executive who regularly buys the Olympics. "So far, they are over-delivering all projections."

Still, this is only a few days into a 17-day event. Historically, the ratings usually trend down as the Olympics goes on. Viewership typically picks up in the latter half of the last week as the big popular track and field events and the gymnastic competition get going. Media buyers say NBC was modest in projecting viewership numbers, in part, because of the large time difference between the U.S. and China.

"It's difficult when there is a big time difference because viewers tend to know the results," said Gary Carr, senior vice president of national broadcast for media agency TargetCast TCM. "They still do monstrous numbers in this day and age. It still kills the competition."

While NBC confirms $1 billion in advertising sales for this Beijing Olympics, media buyers say that some Olympic inventory is being used to help TV advertisers' ratings shortfalls of last season. For the 2007-2008 season, NBC was off 11% to a 3.45 rating among 18-49 viewers, and another 11% down in total viewers to 3.45 million.

Another media buyer said that if the current lackluster TV advertising market was a bit stronger, NBC would be "king of the hill" in terms of grabbing healthy price increase spot buying in last-minute Olympic deals. Instead, some marketers--including the two presidential candidates--secured prime-time pricing averaging around $250,000 for a 30-second spot, a steep discount from Olympic deals previously made.

To date, these ratings results are good news for Olympic TV advertisers. Only U.S.-based events, such as Salt Lake City in 2002, came close to delivering on advertiser expectations. Athens in 2004 also came close. Before that, one media executive notes, the games in Barcelona in 1992, Albertville 1992, Lillehammer 1994, and Atlanta 1996 all delivered or over-delivered for advertisers.

Should things turn for the worse, NBC has a plan in place.

"If there's enough inventory left in the games, they try to make good in the games," says one veteran media agency executive. "If the ratings shortfall is severe, they will expand commercial time available in the games by adding spots. If that fails, the network will make good in other shows, especially fall prime-time shows."

NBC's biggest ratings shortfall occurred 20 years ago during the 1988 Summer Olympics in Seoul, South Korea. NBC was in such a ratings hole with advertisers--some four to five ratings points under promises, averaging around a 16 household rating--that it needed to add inventory into fall shows to make marketers whole.