Are Super Bowl Ads Worth the Price?
The Kellogg Super Bowl Ad Review is just a few days away. Once again, a panel of Kellogg MBA students will evaluate all the spots to determine which ones worked and which ones didn’t.
I do a host of talks and interviews before and after the Super Bowl. The question I get most often: Is Super Bowl advertising worth the high price?
The Investment
Advertising on the Super Bowl is not cheap. This year the headline number for a thirty second spot is $7 million. That isn’t what all the advertisers are paying; there is a lot of negotiation. Still, it is a starting point and in a year like this, with strong demand, discounts are likely few and far between.
But $7 million is just the start. First, many advertisers will run a sixty or even ninety second ad. That $7 multiplies quickly.
Second, there is the production. It can easily cost $1 million to produce a Super Bowl spot, and often more, especially when the creative features celebrities. This year many of the spot will have recognizable figures. Workday, for example, has a remarkable collection of rock stars. Even a somewhat faded celebrity will ask for a lot of money to be in a Super Bowl ad.
Third, the advertising is just the start. Almost every advertiser will spend on a social media campaign to amplify the creative. Firms will use QR codes that lead to websites. There will be promotions and PR efforts and internal communication efforts.
A typical Super Bowl ad effort can easily cost $20 million.
The Opportunity
Despite the high cost, the Super Bowl is often worth the investment.
The broad reach is one appealing factor. Viewership in recent years has been about 100 million people, so a good proportion of the U.S. population. More important, there isn’t anything else that comes close to that sort of reach. The Academy Awards, for example, used to be a huge event and advertisers compared it to the Super Bowl. But viewership has slumped, so now the Academy Awards aren’t even close.
More important is the attention. It is incredibly hard to get people to pay attention to an advertising message. On YouTube, advertisers might have just five seconds before people skip the ad. Social media is powerful, but it is very easy for people to just scroll past a brand’s message.
The Super Bowl is unique because people will focus on the advertising. Many people watch the Super Bowl for the advertising more than the football. People debate the merits of different ads. More than 1,000 people will watch the webinar I do each year with Derek Rucker talking about the Super Bowl ads. I suspect people would not show up for a talk about the advertising that ran last week on the Amazing Race.
The Super Bowl also gives advertisers a reason to engage on social media. Most days, it is hard for a brand like Downy to do anything on social media that would warrant attention. Laundry videos don’t get a lot of views of Tik Tok (though I suspect there is a following). But Super Bowl advertisers have a lot to talk about: the decision to run, the celebrity, the teaser spot, the promotion, the spot.
During the game, the advertisers are all on Twitter, commenting about the game, their brand, and the other advertisers.
The Super Bowl is also powerful as a signaling tool. Everyone knows that a Super Bowl ad is expensive, so spending on the game communicates to employees, channel partners, suppliers, and investors that the company is investing. This can be a powerful and important message.
The Right Fit
The Super Bowl isn’t right for every brand. While the opportunity is considerable, it will work better for some brands than others.
The cost is of course one concern. Another issue is the risk: Super Bowl ads are supremely high-profile. With this comes opportunity and risk. You can damage your brand with an ill-considered effort, and a marketing team and ad agency can both be fired.
Broad Reach
Brands with a broad target market are generally a better fit for the Super Bowl. Who watches the Super Bowl? Everyone.
It rarely makes sense to advertise on the Super Bowl if you have a small target market. You don’t see Vail Resorts on the Super Bowl for the simple reason that many people don’t ski. Why spend so much money to reach people with an irrelevant message?
Margins
Financially, the Super Bowl will only work for brands that generate a strong margin. Commodity brands will struggle to justify the investment. Cars? Sure…there is a lot of profit in that space. Spirits? Of course; the margins are great and brands matter.
Strategic Fit
Perhaps the most important reason is the strategy: there has to be a compelling reason to advertise on the Super Bowl. Why step up? Why take the huge risk?
It might be that the brand has important news to share: a new product, for example. Sometimes a brand is under competitive attack and needs to fight back and send a signal. It could be that a brand has negative perceptions and needs a repositioning. Or sometimes a brand is doing well and has the potential to grow much faster.
You can see different strategies on this year’s Super Bowl. GM is defending against Tesla, spending to push back Tesla in the EV space. AB InBev is investing in Busch, a high potential brand showing growth potential. Fan Duel and Draft Kings are both scrambling to acquire customers, spending heavily as that industry becomes more established.
I suspect the price of a Super Bowl ad will continue to increase in the years to come because it is a compelling opportunity for so many brands, even if that opportunity comes at a remarkable cost.
Opportunities
There are three ways to engage with the Kellogg Super Bowl Advertising Review.
You can join the discussion on social media with the hash tag #KelloggBowl. During the game I’ll be on Twitter. You can follow me at @timothcalkins or just use the hash tag. It is great fun to see what people think of the different spots.
On Monday after the game, my colleague Derek Rucker and I will be doing a LinkedIn Live session. We will spend thirty minutes talking about the spots and answering questions. You can sign up here.
Wednesday, we will host a webinar where we will analyze the advertising. We will show and discuss some of the top spots, some of the weaker spot and a few that are interesting. You can post comments and discuss the ads with us through the session. Sign up here.
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