We have updated our privacy policy and terms & conditions. Find out more here.
9
 

Super Bowl Ads 2014: What Does $4 Million Really Buy You?

By International Business Times  |  Economy  |  Jan 30, 2014 08:34PM GMT  |   Add a Comment
 
AA
+
-

By Ellen Killoran - On Sunday, over 100 million viewers are expected to tune in to the Fox network for Super Bowl XLVIII, where the Denver Broncos and the Seattle Seahawks will battle for the coveted ring. While some of them will be die-hard football fans, others will watch for the spectacle offered during time outs: Super Bowl commercials – often highly stylized and narrative-driven; always expensive -- have become a critical part of the viewing experience, much in the same way that the “coming attractions” inspire most moviegoers to get to the theater on time.

Super Bowl Ads 2014: What Does $4 Million Really Buy You?Super Bowl Ads 2014: What Does $4 Million Really Buy You?

But while the entertainment value of a movie trailer can boost a successful box office run, the same cannot always be said for Super Bowl ads elevating product sales. In January, Advertising Age reported on a study by the research firm Communicas that called into question whether the ticket price of a Super Bowl commercial is money well spent: In 2014, a 30-second spot is reportedly going for $4 million, up from $3.8 million in 2013. The study found that only one in five Super Bowl commercials leads to a sale, or intent to purchase; and that Super Bowl spots fare considerably lower in brand recognition than ads shown alongside similarly high-profile events.

Money Bowl - Ad Prices Super Bowl

"The advertisers really dial up the entertainment quotient to pop to the top of the USA Today rankings and such," Communicas CEO Jeri Smith told Ad Age. "But we find the brand association with Super Bowl commercials is much lower than you'd get with a typical buy, just because of the way the creative is structured."

If the whole point of advertising is to get customers to buy your products, what's the point in spending millions of dollars on an ad that is far from guaranteed to boost sales? For starters, measuring return on investment (ROI) is not an exact science, particularly when it comes to purchase intent, one of the metrics of the Communicas study.

“We’re strong believers that tracking what people actually do is a lot more useful than tracking what they think they will do,” said Michael Mulvihill, Senior Vice President of Programming and Research at Fox Sports. The network co-commissioned a study with Millward Brown Optimor in 2010 that found an 11% increase in sales of products and services advertised in the Super Bowl during the month following the game. “We reject the idea that the correlation between the ads and sales is weak.”

George Parker, an ad agency veteran and author of “Confessions of a Mad Man,” suspects there may be no relationship at all.

“If someone were to do a truly analytical study of the Super Bowls of the last 20 years I guarantee there would be no correlation between [the ads] and increases or declines in sales,” Parker said. “The only way you can directly measure the effect of advertising is in direct marketing ,” which is a targeted promotion that provides an immediate point of sale, like an email campaign that encourages recipients to make an immediate purchase or inquiry. Parker says we don’t see more direct marketing in agency-created advertising because “it's not glamorous.”

But a slick spot at the biggest TV advertising event of the year is. For some businesses, an appearance at the Super Bowl is a way of telling audiences – and the competition – that they are ready to play in the big leagues. Take SodaStream, which sells a relatively niche product that allows customers to create homemade carbonated beverages. SodaStream first created an ad for the 2013 Super Bowl and will be back again this year. “It's really a statement that we are playing serious,” CEO Daniel Birnbaum told AdAge in November. “It has opened doors for us.” For SodaStream, those doors included a significant growth in distribution; which is consistent with industry wisdom that Super Bowl ad campaigns for new or lesser-known products have a better chance of seeing a sales impact than established brands or products.

"It's really hard to argue against [the Super Bowl] as an incredible awareness vehicle; an incredible vehicle to generate talk value and chatter,” said Brad Kay, President of the creative agency SS&K.

While carriers clearly benefit from costly Super Bowl ads, it would also seem that it’s in the interest of advertising agencies to convince their clients to shell out for the big game.

“I would hate to think that we’d be the agency that immediately goes behind closed doors when the clients leaves and says, ‘we have an opportunity to be in the Super Bowl, who cares if it this is really money well spent for the client,” Kay said. (SS&K has not yet participated in a Super Bowl ad campaign.)

Kay believes that while a Super Bowl ad has the potential to be tremendously beneficial, marketers might be more successful if they took a more “holistic” approach to their campaign – one that leverages the high profile TV spot to create more conversion opportunities online. 

“Marketers need to be sure that it’s not an ego-driven decision but a really smart business decision,” Kay said.

Whatever the business risks of investing in a Super Bowl ad might be, they might not compare to the perceived risks of opting out.

“One factor that drives [Super Bowl ad sales] more than anything else is fear, because the Super Bowl has grown to be such a big deal, particularly among companies who have done it regularly,” Parker said. “If they dropped out and sales did decline these guys would be hung out to dry.”

Anheuser-Bush is one of those companies whose ads Super Bowl viewers have come to count on – 2014 will be 26th year Anheuser-Bush will be the exclusive beer advertiser at the big game. This year, the company bought a whopping 3.5 minutes of advertising time for Budweiser and Bud Light. A Bud Light spot introducing the beer's first recloseable aluminum bottle will be the first commercial to air after kickoff; a coveted spot that just about guarantees maximum viewership. (Ads in the first half of the game typically demand a higher rate than those that air in the second half, when viewership can drop off if the game is a landslide.)

“The Super Bowl is a cultural movement that Anheuser-Busch has been a part of for decades, helping us grow our brands to where they are today,” said Bud Light Vice President Rob McCarthy. “It is the most watched program annually, and viewers tune-in for the ads as much as the game.” McCarthy added that Bud Light would be running a social media promotion to accompany the TV spots.

“The month following last year’s Super Bowl marked the strongest Budweiser sales in more than a year,” said Budweiser Vice President Brian Perkins, who pointed out that Budweiser's 2013 Super Bowl campaign, “Brotherhood,” was among those that were successful in both entertainment value (it ranked number one on the USA Today Ad Meter) as well as in driving purchase intent.

In its tenth year as a Super Bowl advertiser, GoDaddy’s strategy appears to be more sharply focused on expanding its customer base than some veteran brands, like Anheuser Bush or Doritos, whose products are already in the homes of many Super Bowl audiences before the opening kickoff.  GoDaddy is a domain name registry that in recent years has targeted small businesses with an expanded suite of offerings.

“GoDaddy has very happy customers,” said Jayme Maultasch, SVP of Deustch New York, GoDaddy’s creative agency. “It’s nice to have some continuity of the overall brand…but I don’t know that you would pay for a Super Bowl spot for the existing user base. Without reaching out to the masses and getting new business, it wouldn’t make sense.”

GoDaddy’s Super Bowl ads – which are known for featuring attractive women -- can usually be counted on to get attention; though it hasn’t always been positive. A 2013 Super Bowl ad, “Perfect Match,” featured Sports Illustrated model Bar Rafaeli in a long, sloppy liplock with a so-called nerd.  The ad topped numerous “Worst Super Bowl Ads of 2013” lists; nonetheless, it helped set a new sales record for GoDaddy, with an increase in 10,000 customers the day after the game.

This year, GoDaddy is eschewing supermodels in favor of male bodybuilders wearing tiny shorts in one ad; in another – whose details are being kept under a tight lid – a real-life woman will announce she is leaving her job to start a new business. Asked how the response to “Perfect Match” might have informed the 2014 Super Bowl strategy, Maultasch said “it was not a question of getting a more positive response, but rather how we would get a similar response – in volume, not sentiment.”

Still, it’s not just about numbers for GoDaddy.

“GoDaddy is a longtime Super Bowl advertiser because they believe there is a greater impact than the amount of impressions they get, or the amount of viewers they get,” Maultasch said. “Buying the Super Bowl buys you a place in the zeitgeist and buys you consideration.”

But not every advertiser is willing to pay for the place in the zeitgeist indefinitely. Familiar game-day brands like Subway, e*trade, and Best Buy will not have any ads airing at the game this year – but none of them directly blamed the rising costs of Super Bowl spots.

E*trade said in a statement that it wanted to expand its media focus beyond TV, and Subway will be allocating its advertising dollars to another high-profile event: "You can make an argument that the total cumulative audience across the Winter Olympics is actually bigger than what you are going to get in the Super Bowl," Subway chief marketing officer Tony Pace told Ad Age.

Best Buy will also be buying some advertising at the Winter Olympics, but a spokesperson said those plans were “independent of the decision” to skip the Super Bowl this year. “We made a deliberate decision to allocate our advertising dollars on a broader assortment of programming to connect with customers,” Jeffrey Sherman said. “There were a number of factors that went into the decision.”

None of the brands or agencies we spoke to were willing to disclose any financial particulars of their Super Bowl ad campaigns, but Wallethub reports that Anheuser-Busch has spent $145.9 million on Super Bowl ads since 2009.

It’s easy to see a $4 million dollar pricetag on a 30-second spot as exorbitant, but in reality it’s little more than a drop in the bucket for some of these bigger corporations. Anheuser-Bush pulled down $40 billion in revenue in 2013; and several Super Bowl advertisers regularly pay out multimillion dollar executive salaries.

“As a percentage of revenue, it’s small,” Parker said. But he remains cynical about the business on which he built a career: “It’s a combination of smoke and mirrors and snake oil.”

 

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add a Comment

 

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Beverages
 
 
 
Are you sure you want to delete this chart?
 
 
 
Are you sure you want to delete this chart?
 
 
 

Successfully Reported

Thank you. This comment has been flagged for a moderator.
_touchLoadingMsg