Commentary

Why Super Bowl Ads Should Cost Five Times As Much

Are Super Bowl commercials worth more than $2.6 million for :30? I think so, and here is my logic.

Last year the New Orleans Saints' victory over Indianapolis in the Super Bowl was viewed by more than 106 million people, surpassing the 1983 finale of "M*A*S*H" to become the most-watched program in U.S. television history, the Nielsen Co. reported in February 2010. Over the years, brands have bought into the hype of this highly watched and anticipated event, and many pony up the millions of dollars for the cost of an ad and the sometimes award-winning creative.

In 2011, marketers are committing $2.6 million for 30 seconds of exposure to this vast audience of potential consumers, but is Fox leaving money on the table? This assertion will not make me popular with the Anheuser-Busches and Career Builders of the world, but I happen to think that Super Bowl ads should cost about five times as much. Why?

Excitement around the Super Bowl and the ads starts well before the day of the game. Articles are already appearing about the Anheuser-Busch family posting images of their ad on Facebook, and the news about Ozzy Osbourne and Justin Bieber teaming up for a Best Buy spot is also gaining traction, understandably so. Brands take advantage of the dollars they spend by creating interesting news about the ads, and once the game is over, ads end up on the Internet and advertising reporters and bloggers talk about them even more.

While many argue that Super Bowl ads are a waste of money because of their lack of frequency, they forget that the brands who create these ads spend a lot of time promoting the ad itself and gaining exposure well beyond the anticipated :30 spot.

They also forget about the power of the call to action. Some of you may recall the Victoria's Secret Super Bowl spot from 1999 that drove so much traffic to its Web site that its server crashed. Perhaps you recall the Career Builder ad that was paired with an online viral media promotion, Monk-e-Mail, which, after a couple of years is still going strong. According to Stuart Elliott of the New York Times, "The peak for Monk-e-mail came in April 2006, when there were more than 4.4 million visits in 30 days. People continue to use it, the company reports, with hundreds of thousands of visits tallied each quarter; 20 percent of all visits have occurred after 2008." Frequency arguments do not hold water if a brand takes advantage of the ad beyond the one-time spot.

Now let's quantify the value and go a little deeper...

It is reported that 25% of viewers will tune in to the Super Bowl just to watch the ads. Of course, we know a majority of the others will pay rapt attention, yet the CPMs charged for the Super Bowl are roughly equal to any highly rated prime-time program.

We know from our internal data that when ads are relevant to consumers, they are 50x more likely to interact with the brand being promoted. I call this the "attention" factor. As stated before, excitement around Super Bowl commercials happens weeks before the event and continues well after the event itself, which adds additional opportunities for consumers to pay attention and interact with the brand.

SuperBowl ads achieve similar engagement levels to opt-in networks because they both deliver higher engagement, and ultimately -- better marketing results for a product or service.

With higher engagement, brands only need to spend about 1/5 of the amount on conventional media impressions to get better performance and ROI. With all of this in mind, if you add in the "attention" factor, Super Bowl ads are actually worth 5x the current asking price or more than $10 million.

12 comments about "Why Super Bowl Ads Should Cost Five Times As Much".
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  1. Edward Feather from Partners+simons, February 3, 2011 at 11:29 a.m.

    I would argue (and could be wrong) that if they were to charge 5 times more for the superbowl ads, fewer companies would participate, and those that did participate would not have the money to do all those pre-promotions that make the ads such a great value right now. Also, putting all that money in one basket - just on the ad itself - would hurt many other parts of the industry. So, while they may be "worth" 5 times what they are paying, it is only because they have the opportunity to create that excitement through other media and spend money in other places. Just a thought.

  2. Casey Quinlan from Mighty Casey Media LLC, February 3, 2011 at 11:38 a.m.

    I can imagine the screaming going on right now across the ad-scape as those already signed on to advertise in Supe XLV put out a hit on you for suggesting the 5X pricing...but you're absolutely right. The ROI at $10M would still be impressive.

    Of course, there are always those who waste their :30 of Supe-ness. I still remember the weirdness that was the ad-roll in Supe XXXIV, including the EDS cat-herding epic. The internet bubble on horseback.

    Wide swaths of the global village watch the game strictly for the commercials. And those of us who usually use our DVRs to avoid ads use them on Supe Sunday to make sure we see every nanosecond of the :30 parade.

    Go Steelers.

  3. Dan Mckillen from HealthDay, February 3, 2011 at 12:31 p.m.

    Nielsen measures viewing in households across the country - but the Super Bowl audiences in bars, restaurants, college dormitories, and other public places aren't counted by Nielsen. And the Super Bowl may be the most watched sporting event in the USA by out-of -home viewers. We're talking millions of additional viewers that aren't part of the network CPM calculations, making ads in the big game even more efficient than reported.

    Another point that may not seem so obvious is that millions of people watching the game in bars are exposed to beer commercials as they get ready to order a beverage. This point-of-sale promotion also adds a lot of value - at least for the beer advertisers.

    Final point worth mentioning - Super Bowl is watched live by 99% (my estimate) of viewers. Commercials aren't deleted via Tivo for live events like they are for popular TV shows that are recorded for future viewing. Richard may be right about the value being greater than what the Super Bowl advertisers are currently paying.

  4. Paula Lynn from Who Else Unlimited, February 3, 2011 at 12:59 p.m.

    The more expensive an item, the more exclusive. The more exclusive a message to the masses, the less competition. So $10 million may backfire on the audience who will see fewer varieties and then wonder why they should spend so much money on just one thing advertised. Does those 10 mils validate the cost of this beer ?

  5. Al Haberstroh from MontAd, February 3, 2011 at 2:19 p.m.

    Wow, what a lazy marketer's POV. ANYONE who is a professional marketer who could not find a more productive way to spend a client's $10 million should find another profession. Yes, there is huge reach and yes there is the additional traction you get from the ad but in terms of pure ROI for a 10 mil spend you can easily outperform the one SB spot. Of course, that's they don't charge $10 million per spot (they would if they could). Smart marketers would not buy the spots.

  6. Bob Kiger from Videography Lab, February 4, 2011 at 2:10 a.m.

    This is crazy talk. As a producer of ads for the Superbowl I say they are fairly priced. Any added value that is accrued is due to the creativity of the advertising agency team and the brands. The Super Bowl ads are worth not a penny more or less than the market bears.

  7. John Grono from GAP Research, February 4, 2011 at 6:08 a.m.

    I loved the "We know from our internal data that when ads are relevant to consumers, they are 50x more likely to interact with the brand being promoted.".

    So, if the average ad has just 1% interaction then a relevant ad has 50% interaction. And if it's 2% ... then 100% interaction. Heaven help if the average ad has 3% interaction!

  8. Jerry Foster from Energraphics, February 4, 2011 at 7:43 a.m.

    Ask your average small company owner what he or she would do with a free one minute ad on the Super Bowl and the answer would invariably be:

    Resell the time and retire, abandoning the company or selling it for scrap.

  9. Khalid Low from Gotham Direct, Inc, February 4, 2011 at 1:02 p.m.

    Your logic is exactly the same as defending the crazy $20M pay checks some of our movie stars make. Just like you did, let me use one specific examples of overpaid actors whose movie grosses do not warrant their salaries but are very much defended by people like you.
    Denzel makes $20M a movie, yet none of his movies have EVER crossed the golden $100M at the box office. Sure, you will throw "American Gangster" my way as a rebuttal but logic dictates that without Russell Crowe, it would have grossed less than $100M
    And you might throw me "The Pelican Brief" meaning you are clearly discrediting Julia Roberts and of course there is "Remember the Titans" which is the only one that you will have a case and I'll give you that.
    Compare that to Jim Carrey or Tom Cruise (before his meltdown) or Tom Hanks (well, lately he hasn't been doing that great) and you get a huge disparity in their box office gross that it makes Denzel look like, well, a nobody. Yet the guy still commands $20M a movie. Sure you may talk about International Territories to which I will let you know that the real "World Cup" is watched by more people than the Super Bowl ever will and yet they do NOT charge that amount for a commercial. Of course I expect you to say US is a different market where entertainment is huge or commercialism is gobbled up way faster than you could say “touchdown” but that does NOT change the fact that the SB looks like a boy scout when compared to the Word Cup in every which way.

    Having said all that, your $10M per :30 second spot suggestion is just a misconception a marketer has in the same way an agent demands $20M for his/her actor, a misconception. There is no return on ROI but because of the huge audience, somehow we see these brands having value. Again, exactly the same way Denzel is referred to – as one of the “elite $20M a movie guy but no return on ROI”. He is just a brand that is perceived to have value because it is what we have become accustomed to or accepted because marketers like you say so.
    PS: I have nothing against Denzel. Love the guy but fact is, he is over paid. Love the Super Bowl but companies are over charged.

  10. Thomas Siebert from BENEVOLENT PROPAGANDA, February 4, 2011 at 8 p.m.

    @Khalid: How does Denzel draw internationally?

  11. Khalid Low from Gotham Direct, Inc, February 7, 2011 at 9:13 a.m.

    @Thomas:For a guy who makes $20M a movie, his draw internationally is abysmal!!! A movie like "American Gangster" made over $250M worldwide but that figure is inclusive of domestic haul (and of course there is the Russel Crowe factor). It's "his" highest gross, the rest are mostly less than half that number.
    U can not compare Denzel's gross to say, Jim Carrey. They are not even remotely close. Ditto Will Smith who is a bona fide international movie star.
    U know even for a faded star like Jean Claude Van Damme who still kicks ass at international box office, does not even get half what Denzel gets.
    My argument is really about numbers. Numbers do NOT lie.

  12. Howie Goldfarb from Blue Star Strategic Marketing, February 8, 2011 at 12:21 p.m.

    But does it sell? Seriously do you really think any major brand with complete advertising overload and saturation will sell more (aka Pepsi, Bud etc) from having a spot? No. Or sell less if they abstain? No.

    For certain brands and product launches immense value. For many just a waste of money in my opinion.

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