Midday Report: March Madness a Bonanza for Broadcasters, Advertisers
Produced by Drew Trachtenberg
March Madness is here, and some say it rivals the Super Bowl for advertisers.
The NCAA basketball tournament doesn't get nearly the hoopla that the Super Bowl garners, but it's a bonanza for advertisers.
It's all about demographics. While the Super Bowl attracts a much bigger audience, March Madness draws a much more specific audience. It's very heavily tilted towards the college-educated sports fans that advertisers crave. These are generally people with money to spend on cars and other consumer products.
And of course, it's not just a one-day event: March Madness includes 67 games over three weeks. With 68 schools in the tournament, there are a lot of alumni with a rooting interest. And just about all of us are in at least one March Madness pool, so we have a rooting interest too.
The guaranteed corporate winners are broadcasters CBS (CBS) and Time Warner (TWX), which has three of its Turner networks carrying the games. By some estimates they brought in more than $1 billion in ad sales from last year's tourney.
The early round games this year cost advertisers about $250,000 for a 30-second spot. By the time you get around to the championship game on April 8, the cost goes up to about $1.6 million. That's about 10 percent higher than last year.
Buick officials say its sponsorship of the NCAA tourney helped the company lower the average age of Buick buyers.
If you're watching the games, you'll also see plenty of ads for rental car company Enterprise, as well as Capital One (COF), AT&T (T), and Coca-Cola (KO).
And Buffalo Wild Wings (BWLD) is not only an advertiser. The sports-themed restaurant chain has an agreement with the NCAA designating the company as the "Official Hangout of March Madness." The tournament is the company's biggest sales event of the year. An executive says that sales reflect how close and exciting the games are, so the company is rooting for lots of overtimes.
And March Madness comes at great time for fans: We haven't seen football in months, and the baseball season has yet to start.