Every time the Super Bowl rolls around, the asking price for the television commercials associated with this massively-watched annual event increases. In fact, those prices have doubled over the past decade or so, from an average of around 2.5 million dollars for a 30-second spot in 2006 to this year’s five million dollars for the same-length ad!
It’s true that marketers get a great deal of exposure with these ads, especially in today’s digital environment where ads are routinely rebroadcast via a variety of social media channels, as well as talked about by both professional and amateur social media “celebrities.”
But all this raises the question: are Super Bowl commercials worth the extremely high cost?
To answer that question, we need to consider the underlying goal of these ads, and that is to build brands. For a select few new brands, the ads serve to build awareness, but for the vast majority of already well-known brands, the ads have been created to build buzz and to create positive affect — that’s positive emotion — toward the brand, with hopes that somewhere down the line, football fans — along with everyone else who sees these ads — will talk about, recommend, or best yet, buy, their products. The marketers are also hopeful that all this thinking about the ads, and the brands behind them, will generate long-term preferences for the brand and perhaps true brand loyalty.
So the value question comes down to understanding whether the amounts of awareness, buzz, recommendations, preferences, purchases, and brand loyalty are high enough to justify the spending of the five million dollars for the 30-second spot, plus the huge production costs for developing those awe-inspiring and often entertaining commercials.
If you consider a purely market-rate definition of “appropriate price,” then the fact that these ad spots almost always sell out means that the price is not only appropriate, but that it might even be a little low. That’s because with a complete sell-out, we can assume that there may have been some purchasers who would have been willing to buy the ad spots for five-point-ONE million dollars rather than “just” the five-point-ZERO million-dollar asking price.
So the answer to our question as to whether Super Bowl commercials are worth the high cost is… it depends. And it depends on whom we ask. To the company trying to promote its brand, it’s pretty clear that the management team thinks it’s a worthwhile “investment” initially at least. Later on, if it doesn’t have the results they expected, they may not think so.
To the marketplace if that company is publicly traded, well, you could probably do some type of event-study analysis and measure abnormal stock price returns on the day that the specific advertising strategy’s announced, but that may not show very much.
To the television network that sells the advertising time slots? Oh, they definitely think it’s worth it.
And finally, to you and me and the millions of other viewers who love or hate or don’t care either way for the Super Bowl ads and the brands that they promote, it most likely depends on whether or not we like the ads so much that we’re willing to watch them over and over, talk about them with our friends, and share them via our social media accounts.
So let me know in the comments below: Are you a Super Bowl ad junkie? Are they your favorite part of the game? (Or maybe the ONLY part that you ever watch?)
Or do you think that companies are massively overspending for the value they receive from buying 30 seconds of air time for five million dollars (plus production costs)?
And while you’re commenting, let us all know your top 1, 2, or 3 Super Bowl ads of all time.
And remember… “When it comes to marketing, it’s only expensive if it doesn’t work.”
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