Are Super Bowl Ads Worth It?

Earlier this month, CBS announced that the network had sold out their advertising inventory for Super Bowl XLVII. Despite a lofty price tag of approximately $4 million for each 30-second spot, brands such as Doritos, Samsung, and Skechers jumped at the opportunity to promote their product on the country’s biggest stage.

Given the startling costs associated with producing a Super Bowl commercial, one must question whether the return is worth the financial investment.

Yes, there is always considerable hype around the commercials during the big game. And yes, the top ads do generate a great deal of hype throughout the following week. However, would brands be better off spending their advertising budgets elsewhere?

Analysts argue that one of the main reasons behind purchasing a Super Bowl ad space is the subsequent bump in stock that comes soon after the announcement. Studies show that stock values jump for companies in the days immediately following the brand’s public release that they will air a Super Bowl commercial.  These announcements are now more often executed via sneak peeks on YouTube, and less so at formal press conferences featuring the company CMO.

Though Super Bowl ads may be good for stock value, or boasting amongst ad agencies, or interesting Monday morning water cooler discussion, they are not the most practical use of marketing budget.

First, the sheer cost of Super Bowl ads typically prevents any brand from purchasing more than one spot. As a result, companies lose out on any opportunity to reach back out to their target audience. Without any degree of repetition, there is little value to the advertisement in the first place.
As proof, focus groups have proven unable to recall which products were associated with specific advertisements. In other words, they may remember that great Darth Vader car commercial, but will not recall which car brand it promoted (Volkswagen).

Another possible reason behind this inability to associate products with ads could be the number of commercials that air within a three or four hour period. When combined with all of the product promotion during the game broadcast itself (ex: Pepsi Super Bowl Halftime Show), there is too much clutter for even the most creative advertisements to make a lasting impact. After a while, viewers lose focus on each individual commercial, another reason why the spots immediately following Kickoff are often the most coveted. Just ask Coca-Cola.

While the massive Super Bowl viewership helps justify the $4 million price tag, it also makes it nearly impossible for brands to develop their ad campaigns. With consumers of all shapes and sizes tuning in for the big game, marketers are presented the challenge of appealing to a very general audience. Oftentimes, the brands are only trying to promote to a more specific target demographic. If that is the case, they would be better off diverting funds to advertising that can speak to this audience directly.

With the invent of new digital technology, brands now have more vehicles for advertisement than ever before. While the digital industry still lags behind in terms of big-brand investment, its importance is growing quite quickly. Digital advertising has several benefits to brand marketers: 1.) it allows them to target a very specific demographic, 2.) it is generally less expensive than television ad space, and 3.) it offers the opportunity to break through the clutter. For example, for the cost of a 30-second Super Bowl piece, a brand could receive a banner ad on the YouTube homepage for eight straight days. Or the brand could purchase enough ad inventory on Hulu to generate over 100 million impressions.

Though the total impressions secured via these digital avenues may be quite similar to those obtained during a Super Bowl commercial, these advertisements ensure repetition and arrive amidst less clutter. Additionally, with more consumers now utilizing their tablets or mobile devices to access information, these opportunities will only increase in value over the next several years. For brand marketers that do choose to purchase Super Bowl ad space, it is absolutely essential that they also engage consumers via these second screens in order to maximize the return on their massive investments.