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Oscar's Advertising Gold

The Oscars
AP
The Oscars

The Oscars aren't just the biggest night of the year for film buffs and the celeb-obsessed, they're also one of the biggest annual events for advertisers, second only to the Super Bowl. The Academy Awards are a rare “un-TIVOable” event in an era dominated by ad-skipping DVRs. And unlike the Super Bowl, the Oscars have fewer minutes of ads per hour, so the ads that do run are memorable.

About 34 million households are expected to tune in to the Oscars this year, flat with last year, which showed a roughly 20 percent drop from 2007. Reflecting that ratings falloff as well as the overall decline in ad spending, a 30 second spot this year sold for around $1.4 million, down from a peak of $1.7 million last year, according to TNS Media Intelligence.

Last year's selection of artsy films that didn't wow at the box office yielded a lower turnout. With the exception of Paramount's "The Curious Case of Benjamin Button", none of this year's films US box office topped $100 million, which doesn't bode well for an audience jump. But on the upside, the fact that the US box office has been breaking records this year speaks to the fact that Americans are into movies and eager for an escape. Plus, with the pullback in consumer spending, a free night of glitzy entertainment is a pretty appealing option.

That said Oscar advertisers haven’t been immune to the economy. General Motors dropped out as the event's main auto sponsor. Former big spender L'Oreal and FedEx are also pulling out. American Express , a sponsor of the event for the past fifteen years is downsizing to a single spot.

But some are taking advantage of the lower prices to make a statement about their strength in this economy. Hyundai jumped in to replace GM as the lead auto sponsor, Audi also running new ads. JC Penney is kicking off its spring ad campaign with a series of new spots. And Coca Cola is running five ads, one for Diet Coke featuring Heidi Klum on the red carpet.

And this year newly loosened rules will allow certain movie trailers to run during the broadcast. For Decades movie ads were prohibited, with the idea that they'd be a conflict of interest. There are rules restricting which trailers can run—no nominated films—but it's certainly a good new source of revenue. Disney and Paramount are among the studios taking advantage of the new rules- Disney promoting "Up", it's new Pixar film.

And just like with this year's Super Bowl ads, the commercials will be designed to drive traffic to websites. There's no better way to reach a mass audience then with a TV ad on a big event like this, but they're trying to get their money's worth, on all platforms.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.