Watching the Super Bowl on TV has increasingly become not
only something that football fans have come to enjoy, but also the general
population. In fact, some don’t even watch the game at all, instead they watch
the commercials because of the reputation that the Super Bowl commercials have
developed over the years as they have become increasingly entertaining.
So, how much does it cost for a company to have a 30 second
ad for the big game? For Super Bowl 50, approximately $5 million, a price
increase of $500,000 from the previous year. At first glance, this may seem
like an atrocious amount of money for a company to put forth for a 30 second
commercial, but as Smith, Calkins, and Rucker discusses in the attached articles,
this price may actually be a deal for some.
Smith discusses several important factors behind why he
argues that this price could be steal for many companies. First, we have to
look at the sheer number of viewers. Super Bowl viewers have been consistently
increasing on a year to year basis, with Super Bowl 48 having about 112 million
live viewers. Not only does the Super Bowl yield a high number of viewers, but
based on previous studies the Super Bowl also has approximately 54% higher
brand recall than primetime commercials. In essence, as Smith explains, this
would be the equivalent of then having about 170 million viewers. The only
factor we have discussed so far is TV. In reality, after Super Bowl games there
is much social media circulation of people’s favorite super bowl commercials. On
average, there is approximately 19 million more views of each commercial on
social media. Bringing these factors together, Smith explains that with these
two factors alone advertisers have a true consumer ad value of $7.7 million.
Combining other factors such as media coverage and increased brand awareness, Smith
does believe that it could potentially be valued at $10 million, like NBC’s
executive Seth Winter suggested.
Given all these factors, I certainly believe that a price
tag of $5 million is justified, however I would say $10 million is certainly a
stretch. Something that I would argue is that the $5 million is only justified
for company that puts in the time, research, and resources into developing a
commercial that will yield positive results. I define “positive results” in
this case meaning it spreads a meaningful image/message regarding their
company, and provides an entertainment factor that encourages the spread of it’s
commercial on social media.
Over the past decade Super Bowl commercial prices have been
increasing dramatically, so a price close to $10 million may not be too
distant. Do you think that a $5 million price tag is fair? What about $10
million?
I think this is an intriguing topic. I am curious about how much money and resources companies will invest with making the commercial. It's one thing to pay $5 million for the ad spot on tv, but its another thing to consider the cost it may cost the company to make a well executed commercial. If a celebrity, or something involves expensive technology like top of the line cameras, graphic design software, or other costs that may come along with it. Is it also a matter of just keeping brand loyalty? How much do well-establihed companies advertisements gain new customers as opposed to just keep the old ones coming back? Thanks for the article.
ReplyDeleteDid not know how much money a 30 second commercial for the Super Bowl was, thats crazy! I think 5 million for 30 seconds is way too much. The amount the Super Bowl makes is absurd, and to add the money advertisers have to pay for an add is beyond absurd. With that being said, the advertisers make over 5 million dollars solely off of that commercial, so is it a fair price for them? I guess so, but personally I think it is too much. Donate some of that money to charity and make your company look good, I think that would be the better option to increase sales
ReplyDeleteI agree with this articles because the amount of publicity that these companies receive is crazy. Some benefit more than others such as Doritos who always produce hilarious commercials and Coke who produces heartwarming commercials. With the "free" publicity the companies receive over social media as well, they are definitely benefitting paying $5 million for 30 seconds. If it wasn't, company's wouldn't be doing it.
ReplyDeleteThis is fascinating and something not many understand. This is an example of why context and background info is crucial to making informed judgments. I do however believe that the prices should be monitored to ensure that it would not get too high in which the market is only available for a select few.
ReplyDeleteThis is a very interesting way to look at it. It is surprising to read that a thirty second advertisement costs around 5 million dollars. Having said that these companies indulged in such advertisements probably end up making more through these advertisements so it is fair in a way as its a win win situation. Having ads that show a companies mission, aim as well as what the product is about shall help these companies benefit the most.
ReplyDeleteCNN also had an interesting take on the topic of SuperBowl ads and if they are worth it or not. It was estimated that nearly 2/3 of SuperBowl viewers are also using social media outlets during the game such as Facebook, Twitter, and Snapchat. This has allowed companies to find cheaper ways to market to more consumers and is becoming more popular due to the rise in price for a 30 second ad. A 30 second advertisement costs around $4.5 million and reaches about 100 million people. With the cost getting higher each year, it will be interesting to see how companies react, and if they start shifting over to cheaper forms of advertisement from the traditional television ad.
ReplyDeleteThe Superbowl is traditionally one of the most watched sporting events in the world and its commercial advertisement has grown every year. Now-a-days, you hear some people talking about the commercials more than the game itself. I think the 10 million dollar cost is pushing the limit. With this high cost of advertisement, only the companies/organizations that can afford this price tag are going to takeover Superbowl advertisement and have an unfair advantage over less wealthy companies.
ReplyDeleteThese companies do extensive market research to find out exactly what to include in their commercials to grab the attention and extract a certain level of interest. Creating a good commercial can leave a lasting impression on the person's mind leading to potentially new customers in the future. So while the the costs are astronomical, these companies make sure their investment don't fail. This always isn't the case however, but it is the hope.
ReplyDelete