Is the Cost of Advertising in the Super Bowl Good Business or an Ego Trip?

September 24, 2006 (PRLEAP.COM) Business News
The Super Bowl is replacing the Addy Awards as the Creative Awards Show where ad agencies, ad managers and television networks showcase their creativity to a huge audience which is believed to be viewing with higher attentiveness and involvement than usual. Research has even found that some viewers enjoy (some) of the commercials in the Super Bowl as much as the game itself.

But at $2.5 million per :30 spot in 2005, and $2.7 million in 2006— plus millions more to create spectacular effects commercials— can the Super Bowl possibly be cost effective? Or, is this media buy mostly an ego trip?

To help answer this question we interviewed Ron Geskey, CEO of 2020:Marketing Communications LLC, who is a consultant and publisher of the Thumbnail Media Planner and

Q: Why does Super Bowl advertising cost so much in relation to other media buys?

A: The short answer is, supply and demand; the networks will always charge as much as advertisers will pay. This year advertisers were willing to pay an average of $2.7 million for one :30 which is almost four times more than the rating justified. Budweiser had four spots which could have cost them $10 million, plus many millions more in commercial production and promotional programs. You need to add up all of the costs, not just the cost of the time.

Q: What would be Super Bowl be worth if it was a normal media buy?

A: It depends on what kind of programming and timing you benchmark it against. In 2004, the Super Bowl on CBS delivered an average household rating of 41.4, meaning that 41.4 percent of the nation's TV households were tuned to the Super Bowl at the 'average time.' Using the first quarter network TV costs found in the 2005 Thumbnail Media Planner, a spot in the Super Bowl, if priced like first quarter prime time, would sell for about $840,000 rather than $2.5 million. If a mix of other dayparts was included, 41 rating points could be purchased for much less than $840,000. Also, if the cost of special commercial production is included, the cost of running one Super Bowl spot could easily exceed $3.5 million, plus the cost of promotions which try to leverage the Super Bowl. Or looked at another way, a $3.5 million investment would buy over 200 rating points or nearly 12 four color pages in Time Magazine.

Q: Are there other factors which make the Blue Sky a good investment?

A: Clearly many advertisers with deep pockets think so. The reality is that the Super Bowl requires up to $2.8+ million in Blue Sky (media & production) for every spot purchased. Is it worth it?

Every sponsor will have to answer that question for themselves. To answer the question, I think it's important to visualize how that great commercial actually works in a media buy. First, the program generates a measured audience of households tuned at the average time. Depending on how much attention they are paying (or out of the room) and how involved they are in the program, will determine what percentage of the tuned audience will even be exposed to the commercial. In terms of attention levels (used as an indicator of the probablility that the commercial will be seen), it is unlikely that the Super Bowl will have higher attention levels than certain prime time shows which are in the 70-80% full attention range. Next, since program involvement is related to commercial recall, the Super Bowl would likely have an advantage over most alternative programming, but not all, especially good dramas. Finally, once the commercial is exposed to viewers who are watching with some degree of attention and involvement, the commercial breaks through and engages the audience in varying degrees. Recall tests have found above average scores in the Super Bowl for some brands and commercials, but not universally.

"Using projected prime time network TV costs from the Thumbnail Media Planner, we see that the $3.4 million investment in the Super Bowl would have purchased about 215 rating points in prime time shows— 5.3 times more. So, while the Super Bowl has a big rating, its price is extremely high in relation to its rating. If the Super Bowl was priced like prime time, it would have cost around $640,000 for time and production. So, just be aware that the 'blue sky' is $2.8 million per spot in the Super Bowl. (Blue Sky is like the value of good will). So the question is whether there is other communications or marketing value associated with this media buy which is worth a premium of $2.8 million per :30 spot.

Will a larger percentage of potential viewers actually see your commercial in the Super Bowl than in prime time? Not necessarily, although attention levels differ among prime time shows and the Super Bowl.

Are Super Bowl commercials just better and more effective? Not necessarily, studies of last year's spots did not find high average performance.

Does the environment of the Super Bowl enhance the communication of the commercial in some way? Some studies have found that spots in the Super Bowl can have above average recall. Other studies have found no lift in effectiveness due to the hyped environment.

If commercial recall in the Super Bowl is a high 50% above average and promotional activities provide another 50% lift, advertising in the Super Bowl is pretty hard to justify with logic.

So it must be the egos of advertisers and their agencies who like the showcase the Super Bowl provides for their creative work? Hmmm.