Is Advertising in The Super Bowl Worth It?

Seth Winter, NBC’s EVP of Sales, had a confident idea of how much a Super Bowl advertisement is actually worth. To be more exact, Winter projected the true value to be $10 million.

Without the projection, what does that ad get you? Don’t be shy. We’re all marketers here.

For this year’s price tag ($4.5 million–not $10 million), advertisers actually get a little less compared to last year. 2014’s Super Bowl XLVIII held the former record of 112.2 million average viewers on Fox, and generated $331.8 million in advertising spend. That works out to almost $3 paid for each viewer.Is Advertising in the Super Bowl Worth It?

Over the last 10 years, dollars spent on Super Bowl advertising has increased at an 8.3% annual rate.

To appropriately estimate this year’s, we apply the same rate to last year’s numbers (since the average cost for a 30-second advertisement this year is $4.5 million, which is 7% more than last year). This puts 2015 advertising expenditures around $359 million–meaning the game must gather an average audience of at least 120 million for advertisers to get the same value as the previous year

Super Bowl XLIX had 114.4 million average views.

Despite falling short, it still set a new record–gaining 2.2 million more viewers than 2014’s game.

Year after year, the Super Bowl’s winning offer to brands is enormous concentrated exposure not available elsewhere in the world of advertising. At upwards of $4.5 million, not including production costs and celebrity appearances, it isn’t a question that brands will find various means to extend the value and reach of their ad. For example, the majority of brands now pre-premiere their commercials online and continue to make them available long after the game–the good or funny videos are successfully shared and seen millions of times. Is that really all brands pay for?

We had originally assumed that for the cost of such a pricey spot, brands must experience significant increase in user purchases for a span of time in order to make the investment worthwhile. However, there seems to be a severe disconnect between viewers appreciating the entertainment value of an ad on Super Bowl Sunday and viewers later making a purchase (or not) in the real world. We’ve found that while viewer sentiments may be high and social activity surrounding “successful” ads go through the roof, it doesn’t necessarily translate into revenue.

Take a look at the top ten most shared Super Bowl ads of all time:

  1. Volkswagen Passat (Volkswagen Group)
  2. Budweiser (Anheuser-Busch InBev)
  3. Budweiser (Anheuser-Busch InBev)
  4. Budweiser (Anheuser-Busch InBev)
  5. Dodge Ram (Fiat-Chysler)
  6. Movie: Fast & Furious 6 (Universal)
  7. Chevrolet (General Motors)
  8. Volkswagen (Volkswagen Group)
  9. Movie: Fast Five (Universal)
  10. Movie: Star Trek Into Darkness (Paramount)

Sitting at the top is Volkswagen, who has consistently advertised during the Super Bowl since 2010. Let’s graph the first three years for easier comparison. (For full numbers, please see this great resource)

Is Advertising in the Super Bowl Worth It?

Is Advertising in the Super Bowl Worth It?

Is Advertising in the Super Bowl Worth It?

A quick look shows an upward spike in the earliest part of the year, and supports the notion that Super Bowl advertising has a positive impact on sales.

Two details can easily dispel this notion. If the ad did indeed directly contribute to sales, the graph line should initially see a small slope, if any, in January and an incredible spike in February. In actuality, both 2012 and 2013 show a gradual increase since January.

The second detail, by adding market trends into the picture, we see the early months are representative of the market as a whole.
Is Advertising in the Super Bowl Worth It?
Is Advertising in the Super Bowl Worth It?
Is Advertising in the Super Bowl Worth It?

Perhaps Super Bowl ads did modestly raise auto sales for VW from January to February each year. If it did, the contributions are miniscule. VW may have come to the same conclusion, and wisely chose not to partake in this year’s game.

As for Budweiser, they’ve successfully ranked for the all-time second, third and fourth most shared ads. However, the company itself is on a steady sales decline and slips to third in the ranks of domestic beer sales. Budweiser went from a high of nearly 30 million barrels shipped in 2003 to about 16 million barrels shipped in 2013.
Is Advertising in the Super Bowl Worth It?

Americans now buy more craft beer in the US than Budweiser.

Viewers are certainly entertained by Budweiser’s puppy ads, and aren’t hesitant in sharing the ad, but the brewer doesn’t have much to show for it. People simply aren’t buying more Budweiser as a result. The recent jab at craft brewers probably isn’t going to help either.

Super Bowl ads aren’t a complete waste:

Supercell, Super Bowl advertising newcomer, likely paid around $9 million to run this 60-second ad for their game, Clash of Clans (excluding production and sponsorship costs of hiring megastar Liam Neeson).

Assuming just 25% of all 114.4 million viewers, or 28.6 million, watched the game ad, then each viewer would’ve cost a little less than $.32.

Modeling after in-app advertising rates, if 1% of those viewers converted, then a cost-per-install of ~$31.5 was paid for 286,000 new users. While a bit pricey per install, Clash of Clans is a relatively old game (released in June 2012), $31.5 fits inside the realm of a reasonable cost.

No one can argue Clash of Clans saw significant lift. On January 31st, the app ranked 38 in iPhone US’s App Store. Following game events the next day, Clash of Clans jumped to 28.

Although it should be noted that a hit like Clash of Clans isn’t necessarily looking for higher chart position–they’ve consistently ranked highly, meaning acquiring new users may not be the number one priority. As a freemium game, the aim of this strategy is to target groups (most likely men) to convince them of the normalcy behind purchasing virtual goods. Clash of clans wants to be seen as just another activity with friends like watching football. The ad served to re-engage inactive users and normalize in-game purchases (this is based on a study at the Game Research Lab at the University of Tampere).

One can probably find other examples where the product advertised is not already widely popular, and Super Bowl influences drove significant sales, but conclusion here is that positive sales impact is very difficult to find in majority situations. While no one can deny the entertainment value of Super Bowl ads, the other benefits of Super Bowl ads are dubious. Advertisers should be fully aware of their return (or lack thereof). If not,Digiday presents several alternatives that mmay help put things in perspective. These are alternate options that get brands much more than just 30 seconds of media including 50 million video views on Facebook,a trending topic on Twitter in the U.S. for 22.5 days, a week’s worth of snapchats, and many more.




4 Smart Tactics of Successful Super Bowl XLVI 2015 Campaigns



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