Super Bowl Commercials: Are They Really Worth $5 Million?

Dylan O’Neill examines how Super Bowl ads are big business for the television networks, but can be even bigger business for the advertisers.

Within the US, not many sports garner quite as much attention as the NFL. With the New England Patriots and the Philadelphia Eagles set to battle next weekend in the Super Bowl, there is one particular facet of the evening that piques watchers’ interests more than anything: the commercials.

Super Bowl commercials themselves have been around for more than fifty years. Since the new hyped title game was launched in the late 1960s, various brands have paid top dollar to have their organisations hyped with it. However, in recent years, prices have begun to inflate to considerable highs for some.

The price for some 30-second Super Bowl adverts this year have reportedly sold for “north of $5 million”, according to Dan Lovinger, NBC Executive Vice President of Ad Sales. Lovinger also said last month that NBC are expecting a “record for single-day revenue generated by a single company”.

The $5m fee this year is a far cry from the 2008 prices, when the estimated price for a 30-second spot was just $2.7 million. The viewership has stayed roughly the same in that time period so why are brands now paying nearly double the fee?

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stats: Kantar media; photo: iStockPhoto

Considering the scale of viewership for the Super Bowl, the numbers make for interesting analysis. According to the Nielsen rankings, last year’s game drew 111.3 million viewers and had “190.8 million social media interactions”. These figures show that the brands aren’t only paying for TV exposure, as The Atlantic’s Derek Thompson said last year, “tens of millions of people quietly watch Super Bowl commercials and actually talk about their favourite moments of corporate branding.

“They [the brands] are also paying for exposure: Super Bowl ads are watched and re-watched—on Twitter, on Facebook, on YouTube, and on next-day rankings and analyses across the internet. On most days, readers click out of ads to read articles online. For one day, they read a lot of articles only to click on the ads.”

In this sense, it makes $5 million per 30-seconds almost seem reasonable. However, there does seem to also be an interesting caveat for why the price tag could be viewed as unreasonable. A big factor for this, as a lot have noted, is the sharp decline in NFL viewership, outside this final game, in recent years, with this year’s average game viewership falling to just 15 million, the lowest since 2008. Taking that in consideration, should it really be necessary to pay “north of” $5 million to feature your brand on national television, especially at a time when viewership has lagged?

“the value of the PR garnered from these spots easily quadrupled the actual Super Bowl media cost”

Tim Calkins and Derek D. Rucker of Fortune shared this idea, last year writing that “if fewer people are watching NFL games, then it would make sense the trend would spill over to the Super Bowl, as advertisers may view the costs as overpriced relative to past years.”

So is purchasing a prime-time slot still really worth it, even taking everything into account? In 2014, Rob Siltanen, of Siltanen & Partners, a Los Angeles-based advertising agency wrote in Forbes that ‘Yes, A Super Bowl Ad is Really Worth $4 million’. His assertion was that, as he was behind two successful ‘Skechers’ Super Bowl ad campaigns in 2012 and 2013, if there is enough of a push through every channel – social media, radio, and print, as well as television – then the project will succeed. Siltanen even wrote that “the value of the PR garnered from these spots easily quadrupled the actual Super Bowl media cost”.

As Siltanen noted in 2014, since the 2012 Skechers Super Bowl effort, sales had risen “by an average of 26%”. The brand also collected a “Shoe of the Year” gong from the footwear industry’s leading magazine during the two year period.

Of course, Siltanen admitted that all of this success wasn’t entirely because of the Super Bowl commercial, but it certainly helped. This year’s newcomers, from smaller brands such as Avocados from Mexico to seasoned professionals Pringles, will be willing their investments will garner similar results.

 

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