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[21 comments]

Is a Super Bowl Ad worth $4 million?

January 31, 2014

Through a special arrangement, presented here for discussion is a summary of a current article from MarketingCharts, a Watershed Publishing publication providing up-to-to-minute data and research to marketers.

The average cost of a 30-second Super Bowl spot has exceeded $3 million in the past couple of years and is expected to hit $4 million this year. Recent surveys suggests that the ads are as big a draw as the game itself, but some other pieces of research looking at advertising effectiveness, online sharing, and brand rankings are questioning their effectiveness as a purchase driver.

NRF projects that 181 million Americans will watch the game this year. What should be enticing to advertisers is Kantar Media's finding regarding last year's game was that tune-out during the average commercial was just 0.7 percent, several times smaller than the average 3-4 percent for regular programming. In fact, Kantar says that last year, the average Super Bowl commercial had an audience size that was 1.6 percent bigger than the average audience for the game.

That tallies with survey results from VB&P, which found that 78 percent of respondents would prefer to watch the Super Bowl with, rather than without, commercials.

Also encouraging for advertisers is Nielsen's findings that from 2003 through 2013, viewership grew from 43.4 million to 53 million TV homes, while the percentage of households viewing the game making more than $100,000 per year concurrently grew from 14 percent to 26.8 percent. In other words, more than one in four households that watched the Super Bowl last year had incomes of more than $100,000.

Interestingly, while Bloomberg Businessweek reports that Super Bowl ad sales have outgrown viewership in the past few decades, the advertising cost of $35 per thousand viewers last year was actually in line with other prime-time TV programs.

But a number of findings question the value of Super Bowl advertising:

  • A study from Communicus suggests that only one in five Super Bowl ads sell products, with the ads more likely to generate awareness than to persuade viewers to actually buy.
  • VB&P's survey indicates that one-quarter of respondents would be more interested in buying a product after seeing it advertised during the Super Bowl, while 15 percent of respondents claimed they would buy something while watching the game.
  • According to the NRF survey, almost eight in 10 respondents view the commercials as entertainment, with far fewer indicating that they make them aware of advertiser brands (16.9 percent), influence them to buy products from the advertisers (8.6 percent), or influence them to search online for more information (eight percent).

 

Discussion Questions:

Is a Super Bowl ad worth $4 million? What is the most valuable aspect of a Super Bowl ad? Do they work better for established brands looking to build awareness or for newer brands and product launches?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Do you agree or disagree that most Super Bowl ads are worth the cost?

Comments:

Let's face it. The Super Bowl is an event that the entire nation - and increasingly the world - comes together to watch. Just as they have for the Golden Globes and the Academy Awards, viewers expect the spots to be the very best of the year. Whether they create a compelling reason to buy or not will always be debated, but the sheer size of the audience for these hyper events and the awareness they create is what will keep marketers stepping up to the plate year after year. Awareness like this endures beyond the moment the commercial runs, and may establish a link to the brand or product weeks after the Super Bowl.

These commercials are also being run online sometimes weeks before the game not to mention all the additional television time the good ones receive on the Today show, Good Morning America and the like. They are also worth it given the non-traditional audience for the game.

People who couldn't care less about football love to watch and comment on the commercials. In fact, it drives me crazy that they talk during the game and pay attention during the commercials which is why whenever we have a Super Bowl party, I have another set on in another room for those of us who actually want to watch the game.

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Zel Bianco, President, founder and CEO, Interactive Edge

A Super Bowl ad has become an event on its own with the largest potential viewership for a TV ad (181 million viewers is HUGE). While the Super Bowl spots drive awareness more so than persuade an immediate purchase, this is a key element for building a brand — the Super Bowl simply offers the biggest reach with a 30 second spot for that effect. And with the attendant news coverage, social media buzz and expert analysis that go on about Super Bowl ads, the advertisers get expanded coverage of their products and brands. So there's a significant amplification effect associated with the event, unlike most others — the ads have become their own marketing Super Bowl of sorts.

The cost for a Super Bowl ad is an investment to build brand equity over the long term. What's key here is that this has to be part of a larger marketing strategy that leverages social media (in broad terms), promotions, and in-store media to create excitement that over time transforms the awareness into purchase decisions.

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Mohamed Amer, Vice President, Global Integrated Retail Unit, SAP

Okay. Let's all agree . . . 4 million bucks seems like a lot of money.

In an era when an evening top rated TV show is hoping to get a 8 to 10 GRP, the Super Bowl will offer 4 times as many eyeballs. The January, 2014 Prosper Monthly Consumer Survey of 6,400 adults indicates that 35.9% of adults 18+ plan to watch the Super Bowl game. 18.8% are eager to watch the commercials before the game has even started (many of the commercials have already been viewed online).

The Super Bowl has become a social event. 26.0% of adults will attend a Super Bowl party, 16.2% will throw a party, and 4.5% of adults will watch the game in a restaurant or bar (" . . . bartender, pull me another Budweiser"). 13.1% of the population will be watching the game to be with friends and family.

Now carry this year's commercials forward for the next several months/years -- employees of the advertisers will talk about and share their company's commercials with family and friends. The networks will show past commercials as they fill content. Blog sites will talk about commercials and question their value, while people will decide they like/dislike the commercials.

Wow . . . 4 million bucks is a lot of dough. I think it's worth it.

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Roger Saunders, Managing Director, Prosper Business Development

I don't believe any single ad is worth $4 million. That being said the hype around this event and the follow up rankings of ads and hundreds of online showings make the investment worth while for most companies.

New items or new companies may benefit the most. They get a big splash that can be followed up with lesser cost reinforcement. Everybody knows Budweiser BUT they reinforce their brand by spreading the cost over all the follow up. Every advertiser probably uses different metrics to evaluate their participation depending on the brand and the strategy.

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J. Peter Deeb, Managing Partner, Deeb MacDonald & Associates, L.L.C.

Gotta love the way advertising people rationalize their trade, trying to objectively measure something inherently subjective.

Sorry to hedge my response, but the answer to all the questions really is: It depends. A Super Bowl ad can do tremendous things for a company's reputation - just look at the launch of the Mac back in 1984. An ad can also do some serious harm to a company's reputation - think that GoDaddy ad with the nerd and the supermodel kissing or any of those Bud Bowl ads in the late 80s.

Most companies making a marketing expenditure of $4 million (plus another $100K to $500K to produce the thing) could probably do a more effective job by customizing their outreach to a more select audience.

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Ron Margulis, Managing Director, RAM Communications

Super Bowl is probably the single most watched event on television, worldwide. More than probably the Oscars. We have hosted a Supper Bowl party every year until now. It's someone else's turn now. I have always noticed those who are never interested in the game for whatever reason - usually their team is not playing - no mater what, watch and rate the ads. This year will be no different. Most recently, the ads get the same hype the game gets.

Yes, I am rooting for Denver because of my respect for Peyton Manning. But if they don't win, I am hoping I enjoy the ads.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

Here's another perspective (results of research from 2009 - 2013) connecting the dots between Super Bowl ad viewership, emotional engagement and consumer action. There seems to be more potential upside to effective commercials than standard survey results may indicate. Please forgive the promotion. Here's the link....

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Joan Treistman, President, The Treistman Group LLC

Super Bowl has become the Common Man's Cannes. Ask any creative director or producer if they would rather have a "Lion" or a shot at the top-rated Superbowl commercial and I doubt there would be much hesitation. Ask corporate sponsors which they would prefer and I can guarantee the answer.

Super Bowl ads make and break careers. Superbowl ads feed corporate egos (a subject with I have some familiarity, having spent time in the Coke/Pepsi war culture.) That is why we spend $4 million for :30 seconds. The rest is just rationalization.

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Ben Ball, Senior Vice President, Dechert-Hampe

I have never seen a ROI for a Super Bowl ad, it seems more like PR value - but the difference is PR value typically doesn't cost $4 million. That money, plus the agency costs to develop the creative, would be better spent by many businesses on better consumer data reconciliation and analytic projects in my opinion. Or, more ideally, have the ad buy complement and bolster an existing consumer engagement program. That never seems to happen because the goal is to be the most controversial, cute or entertaining, at the expense of a relevant brand message to a targeted consumer.

If anything the Super Bowl is a contest among agencies to see who can create the most standout advertising and use the kudos to charge its clients more and gain PR value for itself among agency circles. Having said that, it is a large stage to launch a new company or product, but again it should not be a stand-alone project, but something that leads into other channels and ongoing consumer engagement to make the investment pay off.

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Gib Bassett, Global Program Director for Consumer Goods, Teradata Corp.

The free market dictates the worth of every product and service. When advertisers will pay $4 million - or $4 billion - for a Super Bowl spot, it's because they feel the value is there.

That being said, one of the benefits of advertising during the Super Bowl is the additional unpaid buzz great ads receive on talk shows, daily papers, radio, and YouTube.

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Eric Chester, Keynote Speaker, Author, Reviving Work Ethic, LLC

Is $4 million for a Super Bowl ad a value? Super Bowl ads are only as valuable as to how they arouse viewers actions that create worth for the advertiser in more sales or better goodwill.

The most valuable aspect of a Super Bowl ad is the residual effect it has with media and social networks. Super Bowl ads, whether from established or new brands, work best when they stimulate retentive awe and imagination in the minds and hearts of viewers.

What then is the right price for such glory?

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Gene Hoffman, President/CEO, Corporate Strategies International

The Super Bowl slots may be the last remaining TV Commercial slots that do still have a favorable ROI.

Consumers' relationships with brands have fundamentally changed. Consumers no longer trust "purchased" brand messages. The immediacy and transparency of the digital era have allowed consumers to replace paid messaging with social proof. Consumers also expect personally relevant messages, rather than one-size-fits-all, lowest common denominator broadcast messaging. As a result, the efficacy of "interrupt" driven tactics like TV commercials are at an all time low.

Add to that, audience fragmentation, multi-screening, time shiftings, cable cutting, and the future for traditional interrupt-driven advertising doesn't look very bright.

That being said, if you ARE going to put your money into a TV commercial, the Super Bowl is the one time that broadcast TV does aggregate an audience, and with all the incremental pre and post game commercial buzz, that audience is amplified even further. It's the one TV slot that MIGHT still offer some bang for the buck.

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Jason Goldberg, VP Commerce Strategy, Razorfish

It's Wanamaker's conundrum: half of his advertising didn't work, but he didn't know which half. But to put this into context, there are trillions of dollars sloshing around the global economy, seeking somehow, someway, to grow businesses. This is the world of Marketing and Research & Development budgets - venture capitalists at the fore?

These two major growth machines are the most difficult to manage and hold accountable, even though results can be spectacular. Both require creative sparks that light fires in what is often damp wood. Easier to recognize in retrospect.

In this context, $4 million is chump change for many of the companies with massive cash resources. But nobody wants to waste money!

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Adjunct Senior Fellow, Ehrenberg-Bass Institute

The cost comes out to (just over) two cents per viewer (assuming the entire 180 million see every ad). Would a local ad that reaches - optimistically - 100,000 viewers and costs $2200 seem like a bargain? You bet your snack tray it would!

'notcom'

I question the value of these surveys. Consumers are notoriously bad at saying -- or even knowing! -- what actually affects their purchase behavior. I don't think the surveys means anything.

Here's the survey I want to see: on the Friday or Saturday after the game (the next day that many will shop the products advertised), give consumers a list of 10 brands -- some of which advertised and some of which didn't. Then ask: "which of these had a Super Bowl ad?" If they can't even remember that....

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Jonathan Marek, Senior Vice President, Applied Predictive Technologies

No. This is really something for companies to trumpet their brands and awareness. These are primarily short term, hi-impact ads that generate very little increase in sales, except that they are usually memorable (in their own right). However, when you group many of these together (6 of these at a time or more) then the uniqueness of the ad is minimized as is their impact.

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Kai Clarke, President, Kowa Optimed, Inc.

My professional opinion is that the Super Bowl ads can be an important piece of the ongoing marketing puzzle for the companies and organizations that are trying to influence its present and potential client base to repurchase or purchase their products or services.

As I have always said, if people don't see you, they don't remember you and if they don't remember you - as far as they are concerned- you don't exist.

Tom Borg, Business Expert, Tom Borg Consulting, LLC

Unless you're in advertising and marketing, there are few people who believe the extraordinary sums that are expended on Super Bowl ads are worth it.

The cost is bizarre and out of reach if any common sense and logic are used. The ads make executives feel big and of course the advertising agency can pump up their chest. Understanding that there is secondary and ancillary publicity, the numbers don't show it as being effective for the bottom line.

If you're a new business or launching a new product or brand, the Super Bowl might be the way to go. Still, this kind of exposure is short-sighted and superfluous expenditure at best.

A colleague mentioned to me that there are professional motorsports sponsorships for an entire year that $4 million could pay for and offer a more positive tone than commercials which the public often has disdain for or at the very least are ignored and ridiculed.

And who ever remembers the reason for advertising: to draw attention and interest while trying to inspire action. Ask someone if they remember an ad and they might, but will they remember the product or service. No ... and no is the answer to the question whether a Super Bowl ad is worth $4 million. Absolutely no!

'pigsrule'

Advertising's role is to create awareness. Period. Do any ad during a major event accomplish that? Definitely. If it costs that much to create awareness for the Super Bowl, then the advertisers need to determine if the awareness is generating any incremental demand. If the brand is not well-known, then a compelling ad (emphasis on the word, "Compelling") will drive potential uplift. If the brand is among the most widely-recognized in the market, then uplift will be more difficult to genuinely pinpoint. However, keeping that recognized brand in the forefront of the audience's mind has value, too.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

I hate to rain on the parade but I am not certain. I agree that if advertisers are paying 4 million dollars then that IS what the 30 second spot is worth. The problem I have is that the large majority of the commercials which are remembered the next day because of their craziness or they are funny or weird are LOST if they are not run afterward. I hear people not in marketing or advertising talking about the commercials and which they liked, but most do not seem to have any idea what company was running the ad -- or if they do it is almost disconnected from the ad -- "Yeah -- the Doritos ad was really funny!" END of statement.

I am not sure if we really know the true effect of the ads on consumer behavior. (A Research point right there!) They are a way however to get a HUGE number of people to hopefully connect with an ad, and then hopefully with a particular product/company.

William Passodelis, associate, ML Co.

There is no real business case for a Super Bowl ad. And it's considerably more than the $4 million for the :30. It's at least another $1 million for production and another chunk of change for promoting the ad. Not to mention developing an integrated campaign to convert viewers to prospects or customers. Oops. Scratch that last part. Most advertisers don't do that.

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Phil Rubin, CEO, rDialogue

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