The Super Bowl may be the only televised program in which viewers enjoy the commercial breaks as much as the football itself. A 30-second spot in America’s most viewed television program will cost $4.5 million this year. Last year’s airing of the Super Bowl drew a crowd of 168 million potential consumers. This year’s Super Bowl XLV is projected to surpass its predecessor with over 170 million views, which would make it the most viewed program in U.S. television history. The massive viewership perhaps justifies the purchase of one of these expensive advertisement spots, but what makes a Super Bowl ad worth the price?
The major benefit of advertising during the Super Bowl is establishing a connection between a brand and the viewership of the Super Bowl more broadly. Budweiser is a prime example of a firm that realizes the potential of viewership and brand identity. Budweiser has purchased exclusive advertising rights in the Super Bowl for more than 20 years and appears to be receiving long run returns from their marketing ownership of a sports association. This relationship with the NFL is physically reflected on the special edition Bud Lite can released every year depicting NFL team logos on special packaging.
While Budweiser enjoys a monopoly on beer commercials during the Super Bowl, most firms are forced to compete with their rivals. In a study analyzing the dynamics of Super Bowl ads, Hartmann, a California based economist, discovered an interesting consequence arising when two major firms in an industry release competing ads. The Stanford professor studied two competing soda brands that both released 30-second ads during the Super Bowl and the trends in their revenues the weeks following the game. Unlike Budweiser, who experienced a noticeable growth in sales following the Super Bowl, the advertisements of the two major soda brands returned little to no profit to offset the cost of their investment. This suggests that competing brands don’t necessarily split the “viewership market.” Rather, neither soda is able to establish itself as the soda affiliate of NFL franchise and thus fails to generate any profits.
When you sit down on your couch this week to watch Peyton Manning beat up on the Carolina Panthers, remember to pay close attention during the breaks. The competition on the field is just as real as the one off; instead of touchdowns, though, firms are fighting to win you–the consumer.
Hartmann, Wesley R., and Daniel Klapper. Super Bowl Ads. No. 2139. 2014.