A 30 second commercial during the Super Bowl this year cost $5 million. There are several reasons for this lofty price tag. The first is the reach. Over 110 million people watched the Super Bowl this year. To give some perspective, the highest grossing movie of 2016, Star Wars Rogue One, sold 55 million tickets, game 7 of the NBA finals this past year garnered about 31 million viewers, and only 9 million watched the season finale of HBO’s Game of Thrones. This alone doesn’t justify the hefty cost of an ad. Networks and the NFL realize there is something different about Super Bowl commercials than regular ones: people actually watch them. Every other day of the year, people try to avoid advertisements as much as they can. However, 17.7% of adults say that advertisements are the most important part of the event, according to Prosper Insights and Analytics. The advertisements drum up conversation among viewers when they discuss their favorite ones.
When just observing data it is hard to understand how the price could be so high, and how it has exponentially grown. The cost of a 30-second ad in 2007 was 2.39 million, meaning the price has doubled in ten years. The price has gone up by about 60 percent in the past 5 years despite no significant increase in viewership or number of commercials.
Despite the unique features of a Super Bowl ad, it is still rarely “worth” it. The $5 million price tag the network charges doesn’t include the cost to make the ad or drum up publicity to make it a successful campaign. A study by Wesley R Hartmann titled “Do Superbowl Ads Affect Brand Share” found that commercials from common Super Bowl Advertisers, like soda or beer, had a “null and/or insignificant effect” on revenue. Companies realize that they’re paying millions of dollars for something that won’t help the company, so why do they do it? It is possible for companies to receive significant lifts from a Super Bowl ad. The issue is that any market share gains to be made by a company like Coors is going to be negated by another commercial from Budweiser. This presents a Prisoner’s Dilemma for companies: if none advertised during the Super Bowl, they could save millions of dollars and not experience any change in market share. Instead, everyone advertises and significant amounts of money are lost for no reason.
Some companies are using strategies that make the purchase more reasonable. SunTrust is using digital media to their advantage. They created a website that was designed solely because of their commercial where there is a lot more information for a consumer and opportunities to share through other forms of media like Facebook. For example, they can take a pledge to better their financial health and create their own version of the Super Bowl Commercial. Chief marketing officer Susan Johnson said it best: “We’re not launching a product. We need to get people aware of the issue… The best way to do that is through the Super Bowl Stage with the digital wrapped around it.”
This makes a lot of sense for a company like SunTrust, and probably would for many others. However, a lot of the big boys are wasting money for nothing. With $5 million, they’d likely be better off getting a lot of slots elsewhere.