Grammys Book Big Brands, Bigger Ad Rates as 30-Second Spots Command $800,000 Apiece

Elton John Flava Flav Pepsi Commercial - H 2012

Elton John Flava Flav Pepsi Commercial - H 2012

Pepsi, GM, Bing, Harman Kardon and Ford are among the companies advertising during Sunday's telecast on CBS.

The Super Bowl had its fair share of big synchs and artist appearances this year, but the real music-marketing showcase is the Grammy Awards.

The 2011 Grammys telecast on CBS was watched by 26.6 million viewers, its largest audience in 11 years, according to Nielsen. With that kind of pull, brand sponsors flocked to this year's awards show on Sunday night, enabling CBS to sell out its ad inventory weeks in advance.

"Demand has been really strong, even prior to the announcement of the lineup of talent that is going to be there," says Linda Rene, senior vp primetime sales and innovation at CBS, which has been broadcasting the Grammys since 1973.

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In terms of ad rates, the Grammys can't compete with the Super Bowl (a 30-second spot during this year's game ran as high as $3.5 million) or the Academy Awards (ads for last year's ceremony went for $1.7 million). But the show's stock has been on the rise on Madison Avenue. In 2011, the average spot cost $621,000, up from a 10-year low of $426,000 in 2010, according to Nielsen. Early estimates for the 2012 Grammys put pricing closer to $800,000 per spot, according to two media-buying executives familiar with this year's rates.

Official 2012 sponsors include Pepsi, which teamed with Pandora for a best new artist promotion that included custom channels for this year's nominees and a Friday night party (cheekily titled "We Heart Pop") where such guests as Nicki Minaj, Melanie Amaro and Kevin McHale (Glee) were expected to appear. During the Grammy telecast, Pepsi will be featured before commercial breaks in custom interstitials promoting this year's best new artist nominees and also will air an expanded 90-second cut of its "Pepsi for All" Super Bowl ad starring X Factor winner Amaro and Elton John.

Recognizing this year's best new artist nominees "really emphasizes Pepsi's connection with what's new in pop culture," Pepsi vp marketing Angelique Krembs says. "We're having a lot of fun with music. It's very easy for Pepsi, it's part of the brand's DNA, so we're extending that through the Grammys, the place where music really is celebrated."

The telecast's automotive partners are General Motors and Ford. The latter will promote its Explorer vehicle and music-related in-car features like the car's voice-activated Sync entertainment and communications system.

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The two companies' exclusive lock on automotive spots during the telecast prompted a third car marketer -- Hyundai -- to promote its own collaboration with the Recording Academy (the music-inspired documentary Re: Generation) at events surrounding this year's awards show. Quick-service restaurants, retail and beauty marketers were expected to have exclusive sponsors from their respective categories as well.

Another advertiser, Harman Kardon, opted to debut two new spots during the show. One is a brand-new spot for its JBL speakers "Hear the Truth" campaign starring Paul McCartney (featuring his new single "My Valentine"), the other is a U.S. premiere of a Harman Kardon home entertainment spot starring Jennifer Lopez (featuring an original 30-second score composed by Both spots were directed by Martin Campbell (Casino Royale, The Green Lantern).

"In the music world, the Grammys are our Super Bowl," says Harman Kardon chief marketing officer Jeff Willard, who snagged McCartney for a rare commercial appearance. "In today's world, artists are interested in doing promotions they might not have done a few years ago. For Paul, he can talk about his new album and do it in a way that it helps JBL out. He's able to preview a song to the world."

Even Microsoft's Bing search engine is getting in on the action, premiering a 60-second spot starring rapper Wiz Khalifa that plays up the search engine's tag line, "Bing is for doing." Prior to the Grammys telecast, E! will premiere the spot in a first-of-its-kind integration during its Live From the Red Carpet preshow coverage, with anchor Giuliana Rancic introducing the spot. (Co-anchor Ryan Seacrest is a Bing partner.) "Our new ad provides an intimate, insider look at Wiz and his creative process," Bing director of advertising Sean Carver says.

The Grammys are once again top of mind for marketers because "it's a really strong rating, it's a live event, and there's lots of interest and strong sales against the ads," CBS' Rene says. "It really delivers the goods."