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Grammys: Ad Sales Break Record With Million-Dollar Spots

Lorde Grammy Nominations - H 2013
Getty Images Entertainment
Lorde performs at the Grammy nominations concert

"We liken it to a musical Super Bowl," says CBS' Linda Rene, as the network beats their $900,000 high from last year's show.

This article first appeared on Billboard.com.

With the last two Grammy telecasts drawing the biggest audiences the awards has seen in 20 years, the cost of commercials has adjusted accordingly. A 30-second spot for this Sunday's show cost some advertisers nearly $1 million, after CBS sold 90 percent of the ad inventory during its upfront marketplace over the summer to advertisers for an average of $800,000 to $850,000, according to five executives familiar with this year's buying market. That price point is a new high, after some spots soared past a record $900,000 for last year's show.

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"We liken it to a musical Super Bowl," says Linda Rene, exec VP-prime time sales and innovation at CBS. "It's a huge event for the music industry; live events have really gone through the roof for quite a while. The social aspect has added to the immediacy of that -- there has been an increasingly heavy demand from our partners moreso this year than any other year."

With 28.4 million viewers tuning into 2013's ceremony, the Grammys were the second highest-rated award show of the year, next to the Academy Awards with 40.4 million. (The 2012 telecast was even higher, with 39.9 million tuning in on what was the day after Whitney Houston's death.) So based on audience alone, the Grammys have earned the $1 million price tag -- which, buyers say, is higher than the rate paid for the Golden Globes, Emmys and the Country Music Association Awards. Among 18-to-49-year-olds, they also fared well with a 10.1 rating among the demo -- nearly double the 5.2 nabbed by MTV's Miley Cyrus-crazed Video Music Awards, according to a Nielsen analysis by media-buying firm Horizon Media.

"I kind of categorize [the Grammys] the same way as you would like live sports, where you don't know what the outcome is and it's a high-profile event," says Marc Morse, senior VP of national broadcast at independent media-buying firm RJ Palmer. "Most of the inventory sells out because no wants to take a chance and buy it in [the remnant] scatter marketplace -- it's so important in the retail sector, cosmetics and the younger female demo."

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Further upping the ante this year is an aggressive slate of sponsors with the Grammys' parent organization, the National Academy of Recording Arts & Sciences (NARAS), which this year counts Pepsi, Cover Girl, Gain, Degree for Women, Herbal Essences, Surface, Delta, Chevrolet, MasterCard and Harman Kardon among its official sponsors. Though a NARAS sponsorship is not bundled with an ad buy on CBS, many of those marketers will be airing new spots during the telecast.

This presents some challenges to marketers in competing categories. "Unless you have that relationship, it's very difficult to activate against it [on-air]," says Gibbs Alvin, managing director of implementation at Group M's media-buying firm MEC. "But the Grammys do benefit a little bit this year from being an Olympic year, as there are wide swaths of categories that aren't allowed to advertise in the Olympics because of exclusivity. So you'll see wireless, oil, beverage, foreign and domestic auto marketers who need to get messages out in that 17-day window before the Olympics."

And for the advertisers who couldn't secure a spot on Sunday, CBS has another music-themed event coming on Feb. 9 with The Night That Changed America: A Grammy Salute To The Beatles. "You'll see some similar clients in the show," says Chris Simon, CBS' exec VP of sales.

Adds Rene, "We have a lot of clients who are obsessed with the Beatles, so this is like their own mini-Grammys."