Simone Biles' withdrawal, low TV ratings reportedly have advertisers concerned

Advertisers are concerned about their investment in the 2020 Summer Olympics in Tokyo, according to a report.

Variety published an article on Tuesday that said advertisers are anxious after early declines in traditional TV viewing of the Olympics. Compounding concerns is the withdrawal of Simone Biles from the team gymnastics event on Tuesday. That came hours after Naomi Osaka lost in the third round of the women’s tennis singles event.

Biles and Osaka are two of the biggest names at the Olympics.

TV ratings for the Opening Ceremony were down around 36 percent from the Opening Ceremony ratings for the 2016 Summer Games in Rio.

Even though TV ratings are down so far, NBC has noted that streaming numbers are higher than they have been in the past.

Regardless, a media buyer told Variety that the ratings “clearly are not what NBC, our agency or our clients were looking for.”

So what happens when a media company sells advertising in advance of a major event but fails to meet expectations in terms of ratings? It has ways of making it up to advertisers through what are called “make goods,” which gives the network ads on other inventory. NBC reportedly feels as if it has built in a sufficient amount of “make goods” into its model.

The time difference between the U.S. and Japan, politicization of sports in the U.S., lack of fan attendance, changing TV viewing habits and arguably the lack of compelling storylines are cited as contributing factors to the ratings decline.