The Power of a Super Bowl Ad

Introduction

This year, January 27th is a special day in my life not only because it is my birthday, but also because it marks the tenth anniversary of my first American Football practice. Without football I would probably not be where I am today. The sport allowed me to come to the United States, attend college here, and grow up to be a man with the right values. Naturally I became a dedicated fan of the National Football League, but, growing up in Germany, i was nearly impossible for me to watch the games on television – with the exception of the Super Bowl. The “biggest game of the year” reaches hundreds of millions of people across the globe and easily over 100 million Americans[1]. Such an audience makes marketers drool over the opportunities.super-bowl-commercials-2012-header.jpg In fact, about half of the viewers tune in to the Super Bowl not because they want to watch the two best football teams in the world battle for that elusive Lombardi Trophy, but just to watch the ads. Football’s biggest game is one of if not the only television broadcast where viewers actually look forward to the commercial breaks.

 

Costs

Of course these opportunities come with a price tag, which is steep at $4.5 million for the right to air one 30-second commercial during the game[2]. This yields the obvious question if the investment is worth the costs? When deciding whether to invest in a Super Bowl ad, a company needs to consider several issues. On the one hand, there are those price tags on the rights to air an ad, the production of the actual commercial, overhead expenses, etc. On the other hand, there are a couple of hidden costs that must not be ignored either. To determine the true potential value of a Super Bowl ad, both the actual and the hidden costs must be compared to the benefits.

The first types of costs, tangible prices, are easy to determine. Marketers can simply look up the prices for the rights to air an ad, inquire about the salaries of actors, calculate equipment costs, etc. While the direct costs of a Super Bowl ad seem outrageous, the cost increases from year to year prove how important and powerful the NFL’s championship has become. The price for a 30-second commercial has increased by over 12,000% since the first Super Bowl in 1967. To put this into perspective, the average price of a typical stock at the NYSE has increased by roughly 2000% over that same period[3]. This phenomenon is so interesting because the increase in stock values over the last 50 years is considered large already, yet it is minuscule (6 times smaller) compared to the increase in the price for a Super Bowl ad. Hence, Super Bowl 50 as an event is far more valuable to the market than the average publicly traded sb-ad-rate-vs-sp-500company in the United States. Maybe it is true, after all, that the NFL essentially owns America.

The hidden costs of a Super Bowl ad are harder to determine and, therefore, may not be taken into consideration as much. In fact, these types of costs are oftentimes only a possibility, which means they can be avoided if the marketer does his job right and the ad is well received by the audience. For example, if the commercial is a flop and people remember it more for its failure than anything else, there is a danger of harming the brand. If the ad is a success, however, the opposite happens. Another hidden cost that should be considered is the opportunity cost. Imagine all the marketing campaigns that could be funded with $4.5 million! When thinking about the opportunity cost it is crucial to understand that there is extremely strong marketing competition for the hearts and minds of potential consumers during the Super Bowl. Unless an ad stands out, it may get swallowed up in the midst of the roughly 65-85 other commercials that air during the game. The Super Bowl does not only bring out the best in the players, but also in marketers. At the end of the day, companies line up months in advance for an opportunity to air a commercial at the Super Bowl despite the costs, and the potential benefits explain why.

 

Benefits

Now that we know what the costs are for a Super Bowl ad, the benefits of a marketing campaign developed around the Big Game are enormous as well. First and foremost, the Super Bowl makes brands more visible than any other event and allows lesser-known brands to become relevant. The best ad spots may even reach such iconic status that they are played decades later. Consider Coca-Cola. In 1979, the company created a commercial with Pittsburgh Steelers-great Mean Joe Green. Today, over 35 years later, hqdefaultpeople throughout the United States and even the younger generations that never saw Green play still know about the ad and recognize its slogan: “Have a Coke and a smile.” Thirty-five years later! The spot has been played on television uncountable times during, before, and after Super Bowl broadcasts, has been viewed over 2.5 million times on YouTube, and has most likely been mentioned in every single Top-10-Super-Bowl-Ads countdown since it was first aired. This is the ultimate definition of a successful marketing campaign with outstanding returns on investment and makes it nearly impossible to put a financial value on a well-received Super Bowl ad because the number is unimaginable. One thing seems certain, however – the benefits exceed the costs.

 

Conclusion

All in all, while the costs of a Super Bowl ad are five or more times higher than the entire yearly revenue of many start-up businesses in the United States, this investment is one of the safest a marketer could ever make. These commercials will be remembered for years and are played over and over and over and over again, especially if they reach iconic status. Looking at the definition of marketing – “marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society as a whole” – there is little doubt that a Super Bowl ad creates value for stakeholders, communicates an offering to the majority of most companies’ target markets, and results in customers who are ready to buy. The Super Bowl is a time for marketers to go all in and empty the marketing budget. The potential benefits are simply too large to pass by.

 

[1] Jerry Daykin, “Marketing at the Super Bowl 50 – Go Hard or Go Home,” The Guardian, 21 January 2016.

[2] Jerry Daykin, “Marketing at the Super Bowl 50 – Go Hard or Go Home.”

[3] Mike Ozanian, “Super Bowl Ad Rates Up Six Times Faster Than Stocks Past 50 Years,” Forbes Magazine, 21 January 2016.

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