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Is a Super Bowl Commercial Worth $3.5 Million?

iStock_000016832721XSmallThis week’s Struming comes from my friends at MayoSeitz Media from their blog, the MayoSeitz Media Monitor, which covers the gamut of what’s new in media.

Their recent post, The Value of Super Bowl Advertising, shown in it entirety below, looks at Sunday’s Super Bowl XLVI game and discusses the value of a $3.5 Million investment in a 30 second commercial.

As a student of marketing I think this is an interesting recap, but as a student of the game with a BIG rooting interest in the Giants, I know my eyes will be glued to the TV and there will be no switching away at commercial breaks. I find it interesting that both head coaches, the Giants Tom Coughlin and the Patriots Bill Belichick, are both “old school” disciplinarians, and were assistants under Bill Parcells for the Giants in their youth. They learned early the Lessons in Leadership and have applied them well.

Here is the MayoSeitz Media analysis of the value of Super Bowl advertising. Good stuff from smart people. Go G-Men.

After two thrilling Conference Championship games, the teams are set for the Super Bowl. Giants vs. Patriots.  A repeat of the 2008 Super Bowl when the Giants upset the undefeated Patriots and won their 3rdSuper Bowl. The Patriots are no doubt looking to erase the memory of that game and there would be no better way for them to do so than to crush the G-Men. Let the hype begin. This year’s game, Super Bowl XLVI, will be played on February 5 in Indianapolis, and will be broadcast on NBC with a 6:30 pm kick-off. We have days of over-analysis before the game is played. One of those much chatted about topics are the ads that will run in the game, their cost,  and the value of airing spots in the highest priced media buy of the year.

Each year, regardless of the quality of the game, advertisers pay handsomely for the opportunity to expose their messages during this premier broadcast event. There appears to be no ceiling on cost as exposure within the game this year will cost $3.5 Million for each 30-second announcement. There are many advertisers, heavily skewed to auto makers, who are gladly ponying up the millions to play in the Super Bowl of advertising, including:

American Honda, Anheuser-Busch, Audi, Best Buy, Bridgestone, CareerBuilder, Cars.com, Century 21, Chrysler, Coca-Cola, Dannon Yogurt, Dorito’s, E-Trade, General Motors, GoDaddy.com, H&M, Hyundai, Kia, Mars, Paramount Pictures, Pepsi, Relativity Media, Samsung, Skechers, Teleflora, Toyota, Universal Pictures, Volkswagen, Walt Disney Pictures, and 2nd Start Software.

As we examine the pros and cons of advertising in the Super Bowl, a little historical perspective is helpful. Here are some interesting historical Super Bowl factoids for those who need a refresher:

1. The first “Super Bowl” was played on January 15, 1967 featuring the NFL Champion Green Bay Packers against the AFL Champion Kansas City Chiefs.

Historians will remind us that the two rival leagues had not merged as yet and would not do so until after the third Super Bowl. Green Bay, led by legendary Coach Vince Lombardi, easily won by a score of 35-10

2. The first “Super Bowl” wasn’t even “super”. It was merely called the AFL-NFL World Championship game and was played at a neutral site, the Los Angeles Memorial Coliseum.

There was less than a sold-out crowd, despite modest ticket prices ($12) and a local TV blackout. The term “Super Bowl” was an off handed comment made by Chiefs owner, Lamar Hunt based on his granddaughter’s love of the “super ball” toy. The Super Bowl name stuck and it took on the official name after the third game.

3. The first game was broadcast on two networks, CBS, which carried NFL games, and NBC, which carried AFL games.

CBS charged $85,000 for a 60 second commercial, NBC charged $75,000. The game achieved a combined 41 household rating with 51 million viewers.

Fast forward to today and advertisers will be paying roughly $3.5 million for each 30 second commercial, more than $100,000 per second. This is more than 4 times greater than the cost just 20 years ago, and roughly 85 times greater than the comparable cost in the initial Super Bowl. Today the game’s household rating is comparable to that of the initial game. But the audience is now significantly larger. Last year, the average game audience was 111 million people, which set a record for viewership for an American television program. Expectations for this year is that viewership will approach or exceed that level again. Regardless, the increase in cost far exceeds inflation and audience growth.

Simple math tells you the audience delivery, however significant, can not possibly justify the financial outlay compared to other premium programming and certainly not in comparison to advertising in past Super Bowls, when it was a “relative bargain”.

So advertising in the Super Bowl couldn’t possibly be “worth it”…..or is it? Actually it depends.

There are some mitigating factors when considering the value of an ad in the Super Bowl:

1. There is no comparable event to reach such a significant mass audience. In today’s segmented media world there is no single program capable of delivering the audience that the Super Bowl does. There are very few “water cooler” events on TV with a similar impact.

2. The Super Bowl is far more than a game that delivers a large audience. It’s a happening. That carries with it a value far greater than mere exposure. What makes advertising in the Super Bowl more powerful today is that the commercials are usually part of an elaborate campaign that also includes social media—Facebook,  Twitter and You Tube. Interestingly Chevy is introducing the Chevy Game Time app that can be used during the game to play games, interact through Twitter and win prizes.

The real “value” of Super Bowl advertising is not found solely in the mathematical CPM. There is no event where the ads are often as noteworthy as the game itself, where millions of Americans gather with friends and family to critique the ads as they appear. To advertisers, this represents an enormous opportunity to introduce a mega-commercial that is often part of a new mega-campaign.

What this means is that if you are going to be a Super Bowl advertiser, then the spot needs to be great—not just good. Because there’s nothing worse than spending $3.5 Million and then getting slammed on Monday for airing a weak commercial. And your spot needs to be more than merely effective. To justify the hype, it needs to be a “mini-film” that others will want to view again and again. Therefore talking babies, animals, big production, celebrity talent, etc. should be part of the plan.

But if you hit creative pay-dirt and create a spot that’s a big as the Super Bowl itself, and really want the bang of reaching the widest possible audience then $3.5 Million may be a price worth paying.

We’ll be watching.

Go Giants!




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2 Comments

  1. You are really a student of the sport (marketing) and I doff my cap to you.
    Best,
    H
    H. Robert Greenbaum
    Your Bud

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