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Super Bowl XLVIII: $4m per 30 second ad? Not quite.

Last night, New York played host to the Greatest Show on Earth as the Seattle Seahawks took on the Denver Broncos in Super Bowl XLVIII. Record numbers were expected to tune in as the NFL’s leading offense faced off against its most miserly defense, the much-vaunted ‘Legion of Boom.’ This was music to the ears of host broadcaster Fox, who looked to cash in on companies’ desire to reach as many eyeballs as possible, setting the price for a 30 second ad at around $4m. But is the situation that simple?

In short, the answer is no, but let’s elaborate.

$4m may seem excessive, but it actually represents a ‘price freeze’ as CBS set the same price last year. Although viewing figures have not yet been released, the number of viewers tuning in to see if Peyton Manning could lead the Broncos to victory was expected to exceed the 111.3 million that saw his brother Eli secure his second Championship Ring in Super Bowl XLVI (2012). If this transpires, then advertisers this year will (in theory) have got better value for money. But what about the broadcaster?

It is important to understand that the Super Bowl is not so much a sporting event but a cultural staple in the US. Most households tune in, meaning that it offers advertisers a rare opportunity to hit over 100 million pairs of eyes. This explains why they are prepared to pay so much for a short ad slot. However, just how much do they pay? In most cases, not the price on the sticker.

According to Marc Morse, senior vice president of media-buying agency RJ Palmer, the biggest advertisers such as Coca Cola, Anheuser-Busch, and General Motors will pay much less than the $4m ‘fixed price.’ Such companies buy multiple ads (Anheuser-Busch bought five slots to advertise Budweiser for example) and they buy them early to get a discount. For their part, the networks use the Super Bowl to secure advertising during other broadcasts. For example, last year CBS said, ‘If you want the Super Bowl, you have to buy March Madness.’ All of this haggling makes it difficult to know exactly who paid what, but the big companies, who have Super Bowl campaigns every year, seem to be the biggest beneficiaries.

So, does it represent good value? Again, this is very difficult to assess. Companies tend to pay more for ads at the beginning and end of a cluster as more people see these but the game itself can also have an effect. Some companies will pay more to have their ads air early in the game in case viewers stop watching. This is of particular relevance during a blowout such as the one seen last night (Seattle won 43-8) as those watching fail to be gripped by a non-competitive game. So perhaps this year did not offer better value after all.

It’s difficult to know who paid what and how many people saw which ads, but the companies who advertised were the usual suspects and the millions of columns inches dedicated to Super Bowl ads means that they represent excellent value as their impact lasts a lot longer than 30 seconds.

For more on the American advertising industry, see MarketLine’s industry profile ‘Advertising in the United States’ – Click here now

Posted in Advertising.

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