Is a Super Bowl ad worth $5 million?

Source: "#BradshawStain" - Procter & Gamble
Feb 02, 2018

Despite a 10 percent drop in NFL ratings this season after sliding nine percent in the 2016 regular season, Super Bowl LII ads are reportedly costing more than $5 million for a 30-second spot — about even or a bit higher than 2017 levels.

According to Kantar Media, the average cost of a 30-second spot has grown about 85 percent over the past decade and remains well above the next two most costly properties in 2017 — the NFC Championship at $2.5 million per 30-second spot and the Academy Awards at $1.9 million.

The ratings decline for NFL games over the last two seasons is being blamed on player protests during the anthem to protest racial injustice, concerns over concussions, the loss of popular stars due to retirement or injuries, over-scheduling and poor play.

Some feel people are just watching less TV and being able to follow highlights on social media may also be cutting into viewership.

On the positive side, the decline in the NFL’s ratings hasn’t been as severe over the last decade as other programs, and many still feel live games are less immune to losing TV viewers than shows that can be viewed later on streaming services such as Netflix. It’s also harder to avoid commercials on live broadcasts.

Some also feel the Super Bowl is a different animal than a regular season game. Last year’s Super Bowl attracted 111.3 million viewers, not far off the record 114.4 million that watched in 2015 and more than triple last year’s second-most viewed program, The Academy Awards, at 32.9 million viewers.

The big-budget and star-studded commercials are part of the Super Bowl viewing experience and are also hyped well before the games. A newer phenomenon is the way social media can extend viewership of the commercials well beyond the telecast.

“There’s a symbolic nature of Super Bowl advertising that just isn’t the same as other platforms,” Tim Calkins, a marketing professor at Northwestern University’s Kellogg School of Management, told CNN. “A Super Bowl ad used to be a Super Bowl ad, but over the past decade, it’s really become a two-week extravaganza.”

DISCUSSION QUESTIONS: What can Super Bowl ads do for brands that regular ads can’t? Has the value derived from Super Bowl ads increased or diminished in the last few years? Do they work better for established brands or for newer brands and product launches?

Please practice The RetailWire Golden Rule when submitting your comments.
"Whenever I think ad prices are nuts for the Super Bowl, someone tells me how many zillions of eyeballs are laid on their brand and it all makes sense."
"Brand safe, more viewable than digital, zero fraud, tons of eyeballs … seems pretty attractive for that hefty price tag."
"...for Generation Z ... we love to watch the commercials that are released early on YouTube and we share them to death."

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19 Comments on "Is a Super Bowl ad worth $5 million?"

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Mark Ryski

I think Super Bowl ads are starting to lose their punch. They’ve become analogous to the month-long Black Friday events – people are becoming desensitized. These TV spots can certainly be entertaining, but I wonder what the hard ROI really looks like. Furthermore, with play-back and fast-forward features, who watches TV commercials anymore? Lots has changed since Steve Jobs and Apple made the statement heard around the world in the 1984 ad airing during the Super Bowl. The iPod also used to be hot.

Lyle Bunn (Ph.D. Hon)

The real question is whether it is the best use of advertising investment. It is an easy way to move a lot of budget, but that is less and less what marketing is about. Return on exposures means better measurement and outcome analytics than eyeballs purchased. A Super Bowl ad defines some brand attributes and aspirations and makes sense in some categories (i.e., beer, snack foods) but is a reach for others. Consumers know that it is they who are paying for such ads through their purchases, and indulgent ad spending could actually be penalized by purchase opt-out.

Cathy Hotka

Some of us tune in to the Super Bowl FOR the advertisements, and some of them are outstanding. On the flip side, a lame and expensive ad can really hurt a brand. Step it up!

Steve Montgomery

The hype for the commercials is only slightly exceeded by that for the game. In that regard they have an unusually high value. However I do question the impact of allowing sneak peeks at some of them before game day.

Are they worth $5 million? Like Mark, I would like to see what the ROI looks like. It certainly would be interesting to be part of the group that is deciding to spend that sum of money for a spot. One likely justification is that the cost of the development of the commercial can be spread over all the other times it is used following the Super Bowl.

Kenneth Leung

The Super Bowl ad with its pre and post programs can serve as a rallying point for the brand. The trick these days is to have enough impact and break through the noise, creating the buzz to drive the follow up programs. Not an easy thing to do. For us marketers we look forward to the ads more than the game itself. One year I was in Vancouver Canada tuning into the Seattle station over Canadian cable and was disappointed that they broadcast local Canadian advertisement instead. 🙁

Zel Bianco

There are so few events that are truly American and that you know are being watched by most of America, despite our horrible political discord. This sense of collective sharing of the experience adds to the power of the Super Bowl. Yes there are big concerns lurking for the NFL, but it is one of the few times a year when we can hopefully come together as a nation and enjoy. The commercials are a big part of that experience and for those brands that want to make a big splash, they will get the ROI they need especially if they execute effectively on social media prior to and after the game.

Max Goldberg

Despite a ratings drop, the Super Bowl is the only opportunity for a brand to reach a large, wide audience with one television spot. The ads have become discussion topics, with good ones receiving millions of additional views on social media long after the game is over. The television networks know this — thus the incredibly high price for 30 seconds of advertising.

Art Suriano
Unlike any other television advertising, the Super Bowl TV spot is a once-a-year unique opportunity. People of all ages, all groups and sports fans as well as non-sports fans, watch the Super Bowl. The TV ads have become part of the show with companies and ad agencies attempting to be the best trying to outdo their competition. The ads are talked about for days if not weeks and that brings tremendous awareness to the advertiser — positive if the announcement is well received and contrary if it is not. So immense pressure exists with not only spending the ad money but due to the creative and production costs as well, and of course making sure you have something that will be worth it. I do feel, though, that we are at the peak of TV ad costs because viewership is declining and that will begin to impact advertisers’ results causing prices to come down in the future. But for now, enjoy the game, and for all those Super Bowl TV commercial junkies … enjoy the… Read more »
Sky Rota
5 years 10 hours ago

With a price tag of $5 million only the big players can compete. Which means they are probably well established and don’t even need to advertise. Honestly it’s all about entertainment for Generation Z. We love to watch the commercials that are released early on YouTube and we share them to death. Amazon is definitely in the top picks this year, like I said only top players can afford a spot. What I’m more interested in was the teaser of the light up headset they were wearing in this year’s commercial. Maybe that’s what they want us to see?!

I’m on my way to the Super Bowl. Go Eagles!

Lee Peterson

Every time I think the ad prices are nuts for the Super Bowl, someone tells me how many zillions of eyeballs are laid on their brand and it all makes sense. Today, it’s probably the only place where one single placement can get you that kind of activity. And aside from that, it’s kind of an American tradition to watch the nutty Super Bowl ads and rank them as the game goes on. I don’t see this topping out for a while yet, too much upside for all.

Neil Saunders

Despite changes in media consumption and rating slides, the Super Bowl still affords brands the opportunity for mass exposure to a large segment of Americans.

Good advertisements also generate their own publicity and social media mentions, so there is an opportunity to amplify the reach and resonance.

That said, Super Bowl marketing is a case of “go big or go home.” There’s no point in doing a half-hearted ad. You’ve got to pull out all the stops to make it worthwhile!

Brian Kelly
5 years 10 hours ago

The days of running a 30 second/60 second/90 second bit of video once are over. Super Bowl advertising is now a longer-term strategy — heading into the game and following up afterwards. Super Bowl advertising requires activation similar to event sponsorship. The cost is too great to not amortize across the breath of the MARCOM mix.

Value has increased as the window of the Super Bowl has expanded. Of course, brands need to plan and further invest into the moment.

Driving massive reach the first week of February is not a good investment for a retail brand. Even the extensions pre- and post-game do not add value in driving commerce. Consumers remain in the grip of post-holiday debt.

Consumer goods brands are best served. Brands without rigorous purchase seasonality perform best.

W. Frank Dell II

Is a Super Bowl worth $5 million? For some companies the answer is yes and the rest get a maybe. Large companies have difficulty reaching a broad group of consumers in a consistent format. The evolution of social media and internet advertising make telling the story difficult. Large companies just want to let consumers know they are still there. They always reached their customers this way. Small companies wanting to break out may spend the money to create awareness (GoDaddy). For the rest, other than bragging rights, it could be just spending money.

Al McClain

The Super Bowl remains THE American TV event of the year. But, it has built-in controversy this year. Will some players kneel? How will NBC cover that if it happens? What will Trump Tweet? Will someone get a concussion or other serious injury? I’m sure the ROI is there for a great commercial, but there is risk and opportunity advertising alongside controversy.

Celeste C. Giampetro

Brand safe, more viewable than digital, zero fraud, tons of eyeballs … seems pretty attractive for that hefty price tag. And beyond the big game, the great ads — and even the stinkers — get talked about for days. Go Eagles!

Brandon Rael

The traditional advertising complex has certainly suffered over the past few years, especially considering the significant impacts of the digital revolution, and our collective short attention spans. However, one of the most watched sporting events of the year, the Super Bowl remains the exception! If you are going to invest $5 million into a TV ad, this is the one event where you could make a real impact.

It’s all about perception and brand recognition. If the creative advertising teams come up with a winning concept, it will be talked about for weeks well beyond the Super Bowl. The ROI may not be immediate, or in all honesty measurable, however, if you have millions upon millions of people watching, this is your shot.

Ed Rosenbaum

Yes, all indicators show the viewership declining. But it is still the Super Bowl, the number 1 watched programming event of the year. I have thought the quality of the ads has not been up to the normal delivery over the past two or maybe three years. Possibly the same with the halftime production. But advertisers know we are going to watch it. And their hope is we will remember what attracted us enough that it will make the cash register ring enough to pay off the costs incurred. If we do fail to remember, there will be enough replays over the following days. So we are on the way to another win/win.

Craig Sundstrom

What it can do of course is give (simultaneous) exposure to a large audience, and the hype that now surrounds the ads furthers that.

Obviously only a small fraction of companies (though a large number in absolute terms) can make use of this, but that some are willing to pay the price presumably means it’s worth it.

And Go Eagles … or A(nyone)B(ut)T(he)P(ats)A(gain).

Jeff Miller

Like all good marketing and advertising, the value and ROI depend heavily on the goals, who you are targeting and the execution. If the goal is true ROI on a direct response type campaign, I can’t really see a real opportunity for success compared to spending the same type of budget in other places.

If social mentions and “awareness” are the goals especially for new brands, then there is the opportunity to accomplish a goal. I think what is left out of most of these conversations is the ego around having a Super Bowl ad for both the marketing and C-level leads of many of the advertisers as well as their agencies who want the prestige and notoriety of both creating and having the pull to pay $5M for 30 seconds of attention.

"Whenever I think ad prices are nuts for the Super Bowl, someone tells me how many zillions of eyeballs are laid on their brand and it all makes sense."
"Brand safe, more viewable than digital, zero fraud, tons of eyeballs … seems pretty attractive for that hefty price tag."
"...for Generation Z ... we love to watch the commercials that are released early on YouTube and we share them to death."

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