If the overwhelmingly positive experiences of the three most recent nations to host the Summer Olympic Games are any indication, China is set to break all broadcasting and advertising records when the Games open in Beijing this August.

Every Summer Olympics has had a massive influence on television viewing behavior and media spending. Atlanta 1996, Sydney 2000 and Athens 2004 all enjoyed consistent, double-digit increases in ad spending and dramatic spikes in TV viewership during each Olympic year. Given that China’s advertising spending has been escalating by an average 20% annually over the past three years, and given the readiness of new media to really come of age, the outlook for media at the first Games ever held in China could easily exceed all expectations.

Double-digit ad spend growth
2007 was a fantastic year for China’s advertising market. Adding to that resounding success, the Beijing 2008 Games have brought with them a multitude of international brands and comprehensive sponsorship agreements.

Several sectors are at the leading edge of China’s ad spend growth: finance and banking, driven by a newly open banking industry, increases in income and a bullish stock market; tourism, buoyed by the launch of Olympics-related travel and riding an average annual ad spend rate increase of 20% for each of the past three years; real estate; automotive, for a domestic Chinese market that surpassed Japan in 2007 to become the second biggest automotive market in the world; and food, which is trying to maintain sales volumes in the face of rising prices by increasing advertising 13% from 2006 to 2007.

Even before sponsorships kick in
Olympic-related marketing is a significant tool. The total 2007 ad spend of the 32 Olympic partners and sponsors reached 18.7 billion CNY (approximately U.S. $2.7 billon) in China, up 23% over 2006. China Mobile, McDonald’s and Coca-Cola were the top three sponsor advertisers in 2007, accounting for 43% of total spending. Worldwide partner Coca-Cola has invested heavily in ad promotion, with a 69% growth from 2006 to 2007 based on a unique and creative marketing program.

Such heavy spending on the part of top sponsors creates unprecedented marketing opportunities for some companies and unique marketing challenges for many others. In each of the three most recent Summer Olympics, most sponsors maintained ad activity across other TV networks, while competitors either maintained regular spending levels, hid during the Olympics period or ambushed the competition with aggressive advertising. In Australia, for example, Toyota maintained a strong presence in most months, preempted the Olympics noise with major product promotions in July and August and dropped away during the Games period.

Olympic ad buys revive sleepy seasons
Despite the differences in the market characteristics for Atlanta, Sydney and Athens, each host country saw similar patterns in incremental ad spending, even though Olympic sponsors and their competitors followed diverse media strategies around each Summer Games.

The Atlanta 1996 Games came during what’s traditionally the lowest advertising season of the year, but the Olympics reversed the seasonal ad trend with a 65% increase over the same period in 1995. As for sponsorships, Atlanta 1996 marked the first time that all of the Games’ expenditures were covered by private funding, TV rights, sponsorships, licensing and ticket sales. More than U.S. $1 billion in sponsorships were sold, and broadcasting fees were reported to have provided the OCOG (Organizing Committee for the Olympic Games) with U.S. $898 million.

For Sydney 2000, the main media ad spend for the 2000 calendar year was 16% above the previous year, buoyed by the Olympics as well as ad spending on the part of the Australian government, which was publicizing the launch of GST (Goods and Services Tax).

August is also advertising’s low season in Greece, but Athens 2004 enjoyed the same bump as Atlanta did eight years previously, with overall revenues in main media ad spending up by 13% year on year. Plus, this nation of fewer than 11 million people provided the highest-ever per capita support of any domestic sponsorship program in the history of the Olympic Games.

As impressive as these cities’ records were, Beijing 2008 will combine a booming advertising market with strong sponsorship support to establish a global advertising record. Traditional media advertising will be big, but new media will also come of age, opening up a seemingly endless array of possibilities for sponsor advertising as well as for competitors.

Millions watch the parade of flags
In each of the three most recent Summer Olympic Games, the opening and closing ceremonies won the dominant share of TV viewing, and each host nation saw parallel viewing patterns in the host city and across major cities. However, the entertainment value of the main ceremonies of the two most recent Summer Games could not compete for viewers in China, as audiences there were drawn most dramatically to events featuring Chinese athletes or teams.

The most watched games give way…to the most watched Games
The Atlanta 1996 Games won a significant 17% spike in overall network viewing levels despite their normally slow August time period, a doubling of host network NBC’s average ratings. Interestingly, the other American networks experienced only minor erosion in viewing levels. At the time, the 1996 Atlanta Games were the most-watched TV sports event in history, with an estimated unduplicated global television audience of more than 3.2 billion people, and a cumulative audience estimated at 19.6 billion.

Australian TV networks saw a 39% increase in viewers during the Sydney Games, and supplanted Atlanta as the most watched sports broadcast event ever. More than 3.7 billion people watched in 220 countries and territories, generating more than 36.1 billion television viewing hours, and delivering an 80% share for the opening and closing ceremonies. While the viewership increases mirrored each other, the Sydney Games were broadcast at the end of the traditionally strong TV ratings period, bringing massive gains for the host network but minimal erosion of competitor networks’ audiences.

Round the clock coverage brings millions more on board
Sydney 2000 also represented a major increase in the extent of Olympic Games coverage, with 90% of the coverage broadcast on channels available to the entire population of each country. TV audience numbers in Asia increased dramatically thanks to the extended coverage, a favorable time zone and success on the part of Asian athletes. In the United States, more than 228 million viewers watched 440 hours of NBC coverage—double the Atlanta Games and enough to bring a 70% lift in prime time market share. In China, more than 900 million viewers watched 740 hours of Sydney coverage.

Athens 2004 brought a 20% increase in viewership for Greek TV networks, with more than 3.9 billion people tuning in for more than 12 hours of average individual viewing. Similar to Atlanta, this increase is particularly healthy in light of the traditionally slow TV viewing season. In the United States, 203 million people watched at least some of the Athens Games, an increase of 14% over Sydney 2000. NBC’s Olympic coverage ranked as the top program every night, and by extending coverage to its cable channels, the network attracted over 60 million additional viewers. China dedicated “around the clock” coverage, bringing viewers more than 53 hours of primetime coverage, with an average audience of 85 million viewers.

Go China!
Interestingly, viewership in China during recent Summer Olympic Games rose even higher than host country levels a fact that can be attributed at least in part to the rabid home country fans of Chinese athletes and teams. During the Sydney 2000 broadcast period on Chinese network CCTV5, ratings increased more than five times the non-Olympics weekly average, with a particular rise on days eight and nine of the Games, when popular Chinese events, such as badminton, gymnastics, table tennis and diving were featured. Chinese viewers of the Sydney Games also had the advantage of a time zone only three hours behind Sydney.

For the 2004 Athens Games, China celebrated its best-ever medal haul. When added to citizens’ massive interest in plans to host the 2008 Summer Games, coverage increased significantly and viewer hours topped 9.6 billion. While huge audiences tuned in to host network CCTV5, these viewing trends appear not to have eroded the ratings for CCTV1. Audiences this summer for events featuring prominent Chinese athletes or favored Chinese teams could be astronomical.

Wake me when the show starts
It’s clear that the Olympics change Chinese audiences’ viewing habits, even getting them up in the middle of the night to watch an exciting game. When the opening ceremony of the 2004 Athens Olympics was broadcast between 2:00 and 5:00 am local time, the market share of CCTV5 in Shanghai was as high as 63%, with a 3.8% viewing rate—exactly the same viewing rate as many TV series win in primetime. But this summer in Beijing, that already impressive daytime viewing rate will grow, with events taking place in local time.

The demographics of the audience will also change; women generally outnumber men in the TV audience, but the ratio shifts in men’s favor during the Olympic Games. And while the coveted 25–34-year-old age group and highly educated viewers generally watch the least TV, both groups watched more TV during past Olympic Games.

Small screen games
Out-of-home viewing will provide a significant boost in audience levels and sponsor exposure for Beijing 2008, and online audiences will bring tremendous leverage. Internet penetration and usage levels in China have doubled in the past five years, with the average time spent online growing from 8.2 hours a week in 2002 to 16.4 hours a week in 2007. But nearly 80% of the Chinese population—mainly outside the main cities—has yet to feel the Internet boom.

Chinese host network CCTV has announced a significant new agreement to become the official Internet and mobile phone broadcast provider for the International Olympic Committee, making the Beijing Olympics the first Games in history to use the Internet and mobile phones to broadcast the Games live.

And the favorite for the 100 meter sprint is: the Internet
That momentous news is even more incredible in light of the brief history of the Internet. U.S. TV network NBC began its online coverage of the Olympic Games in Atlanta in 1996. Internet presence was dramatically increased during the Sydney 2000 Games and again in 2002 at Salt Lake, when NBCOlympics.com averaged over one million visitors a day during the Winter Games and set a single-day record with 2.4 million visitors. The official website of the 2000 Sydney Olympic Games saw more than 8.7 million unique visitors, 11.3 billion hits and 230 million page views during the course of the Games. Audiences peaked at 1.2 million hits per minute on September 27, when Korea was playing Japan for the bronze medal in baseball and the U.S. and Russia were competing for the gold medal in women’s tennis.

With the growth in Internet audiences and the massive new participation of new media over the eight years since Sydney, online Olympic audiences will be enormous this year. However, the time spent watching TV has remained fairly steady in China at 21 hours per week, and the majority of Chinese continue to cite television as their main source of information.