No one can argue that football has become a religious Sunday holiday for many households in America. When the Super Bowl is underway this coming Sunday, many audiences will tune in to the game even though their favorite team or athlete(s) is not playing. For those who aren’t interested in the game, the commercials are exciting to watch and for some, it may be even more fun to watch than the actual game itself. Millions of people anticipate what brand will stand out and what company will have the best and funniest commercials for the water cooler talk at work on Monday. Some of the known brands for viewers to anticipate are ads from Budweiser and Coca-Cola, while other brands such as Doritos and Pepsi are looking to make a comeback for 2018 (Michaels, 2018). There will be many brands fighting for the attention of over 100 (110 est.) million viewers (Orszag, 2018).
The price of advertisement on Super Bowl Sunday is ridiculously high at a minimum of $5 million for a 30-second spot (Spross, 2018). That’s a jump from $2 million just in 2002, and at $4.5 million in 2015 (Spross, 2018). The cost continues to climb and it makes one think as a brand, is it really worth it? At what cost will the investment of the Super Bowl ad will be reciprocated? One of the reasons for the uphill in cost is that the Super Bowl is a social event and in a digital era, it is a live event that can’t be fast forward or viewers skipping through the commercials (Spross, 2018). However, if this cost continues to go up, will the value of ad be profitable for the 30-second spot? At this point, I don’t believe that it’s not worth the money, but that’s not what the NFL wants advertisers to think. I have to give it to the NFL for believing that they are worth it.
Economists did conduct a study of ads for films that aired during the Super Bowl between 2004 and 2014 (Orszag, 2018). In their research of 70 films, the results were an $8.4 million increase in revenue from ticket sales that does not include sales from the opening week (Orszag, 2018). The success is due to Studios expectation of commercial box office success (Orszag, 2018). Thus, only movies that studios knew would generate a high volume of ticket sales are aired during Super Bowl slot such as summer blockbuster. Measuring the effectiveness of ads on brands, on the other hand, is extremely difficult. According to marketing experts on a recent survey, ads during Super Bowl cost is less effective because the ads don’t translate directly into increased sales or consumers intent to purchase (Orszag, 2018). However, economists argue that ads do pay for themselves and are more effective than what marketing experts claimed. Ads that run in the cities of the team has a 20 percent more viewership than other cities (Orszag, 2018). Of course, no one knows what team or cities will be in the Super Bowl because ad spot is purchased in advance (Bloomberg). Another reason ads work because beer and sodas have high consumption rate during the game (Orszag, 2018).
So based on the research done, it still seems that the benefit still does not outweigh the cost. It only works for specific circumstances such as beer since many people drink during the game. There are no overwhelming results that the cost for an ad will translate into dollars for a brand. The game has already decreased by 10 percent viewership this year alone (Spross, 2018). So why do the cost of ads still going up? The ticket sales are already steep enough and the NFL is making money in merchandise and concession. So why do advertisers still want the spot when they know that the likelihood of investment may not be worth air time. Do they still believe that the more exposure the brand gets, the greater the chances of profitability?
Michaels, M. (2018, January 25). The price of a 30-second Super Bowl ad has exploded – but it may be worth it for companies. Retrieved February 04, 2018, from http://www.businessinsider.com/super-bowl-commercials-cost-more-than-eagles-quarterback-earns-2018-1
Orszag, P. R. (2018, January 31). Some Super Bowl Ads Are Worth the Price. Retrieved February 04, 2018, from https://www.bloomberg.com/view/articles/2018-01-31/some-super-bowl-ads-are-worth-the-price
Spross, J. (2018, February 02). Are Super Bowl ads really worth $5 million? Retrieved February 04, 2018, from http://theweek.com/articles/752440/are-super-bowl-ads-really-worth-5-million