“Give it to me I’m worth it”?

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. 

Fifth Harmony, Worth It ft. Kid Ink, Reflection

 

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?

References:

 

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

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4 Responses to “Give it to me I’m worth it”?

  1. Chad Marshall says:

    Kristian, what a fantastic and timely post, thank you.

    Your well thought out analysis brought out several great points to ponder further, however, I think the most compelling assertion is that for an ad to achieve its highest rate of ROI, the ad has to take into account all of the underpinnings from your analysis which spotlighted just how unique this live broadcast of the Super Bowl is in sharp contrast to the how we as a cultural now consume media, and as a residual, the advertising attached to it. As the media landscape has changed dramatically over the last 5 years, it often feels like most of us no longer watch live television nearly as much as we did 5 years ago, let alone 10 years ago. For me and my family, we almost watch everything either via our DVR or On demand, with a few exceptions for live sports (just me) or CNN. So given this global shift in HOW we consume media, it does support why the 30 second rates have jumped exponentially based on the uniqueness of what the Super Bowl offers to marketers which in unlike any other platform that exists.

    All that said, your analysis also identifies that in order to make best use of this unique planetary alignment each year, a brand has to evaluate whether or not their brand/product/service will truly benefit from this costly venture because its not just the media time that one is buying but also the costs of R&D, the actually production of the commercial (which can easily run into the millions), coupled with all of the complementary media components that would be integrated into the commitment on other platforms (online, print or radio) if a company and its agency decides to fully commit to an all out campaign. So once all the dust settles financially, a company can easily be pot-committed to the tune of $10M when everything is said and done.

    So that question than becomes, “how to we measure its success?”, and “does the $5 to $10M commitment make sense?”, where this unique platform primarily only benefits a certain type of brand/product/service when taking into account the colossal stage and the juggernaut competitors that will be playing along side your company’s ad, because the next question is what is the ultimate goal of your ad? Is your company trying to make a splash and this is your Hail Mary?, and does your company stand the risk of being dwarfed by the “big boys” who might make your ad look small and forgettable comparison to their deep, deep pockets and experience? The gamble worked for a fledgling dot com many moons ago, when GoDaddy’s tiny tiny spot struck a cord against the big boys, but many experts would say that gamble was 1 in a million, but who knows, that why we play the game right?

    As they say, Any Given Sunday…

    P.S.
    I would have posted the link for the first GoDaddy Super Bowl commercial, but it’s somewhat racy so I’ll let all those interested to find it themselves.

  2. Bobby Borg says:

    Hey there, Bobby Borg here.

    What a timely post. Go Eagles.

    You’re right, I’m going to watch the Super Bowl even though none of these teams are really my favorite, but it’s not really for the commercials. Don’t get me wrong, I think that they are funny, but for practical purposes, they typically do very little at informing their target audiences about the benefits of “why they should buy.” And as a marketer, that’s the lens I see through—-especially when I know these spots are costing millions. Yikes!

    This got me thinking: so what really are Super Bowl ads about? I stumbled upon this great article in Forbes magazine: (https://www.forbes.com/sites/robschwartz/2013/01/21/do-super-bowl-ads-win-advertising-awards/#76510034524e)

    According to Schwartz (2013), Super Bowl ads are really about building awareness. They have nothing to do with USP’s (unique selling propositions) like advertisements during the rest of the year.

    Schwartz further states that the audience is America (i.e., everyone). It is not a segmented group where the product is meaningful to the majority. Thus, In order to keep “everyone” entertained, they create adverts for the adverts sake alone. No real meaning. Just exposure, Awareness, and the “talk about me on Monday” factor.

    Thanks for a great post.

    Bobby Borg

  3. Ashton Edwards says:

    I watch the Super Bowl solely for the commercials but personally, I don’t think I’ve had the intent to buy after I have seen the commercials. That is just me but how many people are out there that share in my love to see how creative companies get to create a captivating 30 commercial during one of the most watched games of the year? I’m probably not alone. But I found it interesting that the benefits outweighed the costs when it came to beverage consumption. You suggest that it could be due to the beverage being consumed during the game but how often are people leaving to go get these beverages during the game? I would like to posit that its the all around marketing effort that goes to promoting these beverages before and during the game. At my local Safeway there were various deals on Budlight with the Superbowl logo plastered on the side of the boxes. It would be facinating to see what sales are 30 days before the Super Bowl compared to 30 days after a super bowl commercial years then compare these YOY.

  4. Jason says:

    Hi Kristian,

    You made excellent points on the blog, and I respect your point of view. Now before I comment, I want you to know that I’m not a football kind of guy (as you may know from working with me in the past). I’m telling you that so you know my answer is not biased as a football fanatic. In regards to your blog post, I do agree that a $5 million price tag for 30 seconds is expensive, but I also think from a branding perspective, it is reputation and a status symbol for brands to be in the SuperBowl. How many brands can say they were part of the SuperBowl? Also, there is a “Halo Effect” at large events like the SuperBowl that may not translate into dollars and cents. When consumers are having a good time at the stadium or at their house watching the game, they will associate these positive feelings with the brands that paid $5 million for that 30-second spot. Advertisings can gain emotional appeal or perhaps they paid $5 million to change consumer attitudes.

    Your argument that beer and sodas brands (e.g., Budweiser, Coke, Pepsi) are more successful ads at the SuperBowl because of the high consumption rates during the game, meaning the product is more relevant to the environment. I do think that is true to some degree, but I also know those brands have the deepest pockets in their advertising budget. This year, I think Amazon’s Alexa stole the spotlight as “best ad” in the SuperBowl this year, so it proves that advertisers don’t always have to be a beverage brand. I don’t foresee the cost of SuperBowl advertising going down in the near future, it’s like San Francisco’s rent prices, it only goes up!

    Thank you for posting about the SuperBowl, we’re going to be discussing the ads this week in Dr. Pade’s live session.

    Best regards,
    Jason

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