With both the men’s and women’s basketball teams dancing to the Final Four, Syracuse is making history this spring in the NCAA March Madness tournament. In the business world, the real madness is happening behind the scenes—with marketing opportunities abounding from the televised games, fan merchandise, bracket challenges and more.
Since the first March Madness tournament in 1939, the event has grown into one of the most popular post-season competitions in sports. The NCAA earns about $900 million in revenue each year from March Madness, making the tournament its most profitable business.
Games are broadcast live by CBS Sports and Turner Broadcasting, owners of the television rights to the tournament that are worth $10.8 billion. In addition to coverage on all four of CBS’s major television networks (CBS, TNT, TBS and TruTV), games are also broadcast online, on the radio and through various mobile apps.
With an estimated 181 million viewers tuning in throughout the three-week tournament, advertisers have abundant opportunities to reach a large and diverse audience. In 2015, advertisers spent over $1.1 million on televised ads, $27.6 billion on computer ads, and a whopping $34.4 billion on mobile. For advertisers, the emotional ties that viewers hold to the tournament make it worth the spend. “People are so attached to their team that they’re very keyed in to anything about the tournament,” explained Whitman Professor of Marketing Practice Scott Lathrop.
And for this reason, it’s practically impossible to turn on the TV and not see an advertisement related to March Madness. “Especially in the Elite Eight and Final Four, brands use things that happened in the last couple games as part of their campaigns,” said Lathrop. “Those advertisements are the ones that will be really effective, because people know they represent a company that is really paying attention and watching the games.”
For schools in the tournament, March Madness can also offer big payouts. Simply appearing in the tournament can net a school around $1.67 million. Schools that make it to the Final Four can expect to make around $8.3 million. Most of this money comes from the NCAA’s Basketball Fund, which distributes money to the different conferences based on their tournament performance, who in turn distribute the funds to their member schools.
The NCAA March Madness tournament is also one of the biggest gambling events of the year. For the 2016 tournament, Americans placed an estimated $9.2 billion in bets on brackets, pools and contests. Many of these bets are placed at an individual and informal level, with only an estimated $262 million coming in through legal wagers to the American Gaming Association. Upwards of 40 million people filled out brackets this year.
The marketing opportunities from March Madness aren’t just limited to athletics organizations and tournament advertisers. The buzz from the tournament provides countless opportunities for marketers to generate content around this hot topic. Brands such as Oreo, AT&T, KFC and Harley-Davidson have all used the tournament as a jumping-off point for social media and content campaigns.
“It’s almost like brands are saying, ‘we’re like you, we watch basketball too,’” explained Lathrop. “Brands making a connection through the basketball interest are appealing to the fervor and emotional aspect of sport, and that can be really effective.”
As the tournament wraps up this weekend, marketers will be on the lookout for last-minute opportunities to leverage the big money coming out of the games. And by the time the winning team cuts down the nets on Monday, many businesses will be celebrating marketing wins of their own.