Only advertisements live up to Super Bowl hype
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Jeffrey Goldfarb
Believe the Super Bowl hype — at least when it comes to the advertising. The National Football League’s championship game rarely makes for exciting television: In the 44 preceding Super Bowls, the average margin of victory is more than two touchdowns. The commercials between plays make a far more compelling proposition.
A 30-second ad during this year’s match on Sunday in Dallas between the Green Bay Packers and Pittsburgh Steelers will cost about $3 million. That’s 500 percent more than it was 25 years ago, or 200 percent in inflation-adjusted terms. The viewing audience, meanwhile, has grown by just 24 percent. At first blush, the hyper-increased rate charged by News Corp’s Fox network looks hard to justify.
The combined population of the Green Bay and Pittsburgh metropolitan areas is about 2.6 million. If the TV ratings match last year’s game that would leave the remaining 103 million viewers with little more at stake in the outcome than maybe the $100 office pool. It goes beyond the conventional wisdom that advertisers have so few ways to reach an audience so big all at once. Most people tuning in to the Super Bowl these days sit up and pay attention only when the football stops and the commercials start.
Companies big and small get considerable bang for their buck. Little-known online companies like web registration service GoDaddy.com, vacation site Homeaway.com and precious metal refiner Cash4Gold.com made names for themselves with Super Bowl spots. Since its titillating 2005 ad, GoDaddy’s market share in the Internet domain registry market has gone from single digits to nearly 50 percent.
Even the most established brands cling to the big event. General Motors and Pepsi will be back this Sunday after ditching it last year. They may have more to protect than start-ups. Super Bowl advertisers on average experience a 12 percent bump in sales the week after the game, according to Millward Brown Optimor. A month later, sales for smaller firms are typically still up 3 percent compared to 9 percent for better-known brands.
That means the corporate return for a half-minute of air time will be considerably higher than for most of the couch potatoes who invest four hours of time watching the game.