Academy Awards ad inventory is sold out, but show may not deliver on advertiser expectations

The news: Disney has sold out all 50 commercial slots for ABC’s broadcast of this year's Oscars, according to Rita Ferro, Disney’s president of ad sales, in an interview with Variety.

• The popularity of the Best Picture candidates often affects the show's ratings. But while movies like “Spider-Man: No Way Home” ruled the box office, films that with fewer viewers—such as “West Side Story,” “Belfast,” and “Coda”—are among this year’s Best Picture nominees.

Behind the numbers: The Oscars aren’t in the best place.

• ABC’s 2021 telecast received an average of 10.4 million viewers, the lowest ever for the event and a 56% reduction from the 23.6 million who tuned in in 2020, per Nielsen data. The Grammys and Emmys haven’t fared well either.
• Loss of viewership has hurt advertiser interest: The Oscars brought roughly $115.3 million in advertising revenue in 2021, per Kantar data—down 10.7% from ABC’s $129.2 million ad take in 2020.
• Disney sought $1.7 million to $2.2 million for a 30-second spot, per Variety—meaning that this year’s advertising haul for the Oscars is highly likely to be a dropoff from 2021’s weak figures.

The 2022 Oscars come at a time when consumer attitudes toward TV are changing rapidly. Eighty-two percent of US adults prefer to watch ads before a show rather than during, per an October 2021 Harris Poll study. That same study found that 81% multitask during commercial breaks.

More sponsors purchased ads during the “scatter” market—inventory purchased closer to air time— rather than the “upfront” market farther in advance. Two reasons explain this: the pandemic making it difficult to predict market conditions months in advance, and the benefits of programmatic advertising, which is purchased via auction and need not be secured early.

Digital killed the TV star: Streaming and connected TV (CTV) viewing is on the rise, and that’s clearly taking a slice of linear’s ad pie.

• We expect CTV ad spending to rise 32.3% this year, per our forecast—versus a paltry 3.0% rise for standard linear broadcast and cable. In 2022, linear TV ad spending will be about 3.5 times that of CTV ad spending; by 2025, it will fall to just 1.9 times that of CTV ad spend.
• This year’s Super Bowl proved that cross-platform viewership will be important to major events. The Oscars will be broadcast on ABC and can be streamed on abc.com or the ABC app. A free trial of YouTubeTV or Hulu Live TV will also allow access, but that’s asking too much of the typical user who can view plenty of other content.

The big takeaway: Much rests on the shoulders of this year’s Oscars, but the show will be hard-pressed to deliver for advertisers. While the awards are an opportunity to enter the zeitgeist, audiences are increasingly fragmented. A modest bounceback from last year’s disappointing show is probably the best ABC can hope for.