The Super Bowl is close and brands are, once again, paying millions to get advertisements on the broadcast.
Advertisement space sold out in November, said The Hollywood Reporter, and it cost as much as $7 million for a 30-second ad during the game.
It’s debated among advertisers and academics if it is worth the cost. On one hand, brands are practically guaranteed 100 million viewers. On the other hand, viewers can be judgmental and react poorly to commercials that aren’t funny, researchers say.
Q: Are Super Bowl advertisements worth the money?
Alan Gin, University of San Diego
YES: In a world of fragmented media with hundreds of channels and other viewing options, live sports in general and the Super Bowl in particular are one of the few areas that can attract a lot of viewers. On top of the people who actually see the ads during the game, there is often a significant buzz afterwards for particularly memorable ads, which furthers their impact. Super Bowl ads are expensive, but there is no other place where such a large audience can be reached.
Bob Rauch, R.A. Rauch & Associates
YES: But here is the caveat — it must be the right product (gaming, food and beverage, automobile) and must resonate quickly with the 100 million+ viewers. It must also be part of a business plan, not a one-off ad that hopes to be the business plan itself. That precludes most small companies or religious organizations that cannot afford it. This year’s game between San Francisco and Kansas City with Taylor Swift will be broadly watched!
James Hamilton, University of California-San Diego
YES: There’s no other way to reach 100 million people at one time. And if you can get people talking about the ad, the social buzz can be more valuable than the ad itself. If it’s a standard commercial that just tells people to buy the product, it’s probably not worth the cost. But if you have an effective message and a memorable way to deliver it, a Super Bowl ad could be the way to go.
Chris Van Gorder, Scripps Health
YES: But with caveats. Such an advertising decision must be based on research around the specific product, budget and market opportunity. Some companies may see value in the initial impact, which can be high because of increased awareness and the ongoing conversations around the advertising following the Super Bowl. However, the real test is whether the millions of ad dollars spent result a long-term positive effect on brand preference — and on sales.
Jamie Moraga, Franklin Revere
YES: The Super Bowl provides the largest television audience reaching an estimated 100 million people across several demographics. Companies wouldn’t be spending an estimated $7M on a 30-second spot if they didn’t think it produced a return on investment in the form of revenue, sales, or increased brand awareness. With the amount of data and analytics available, both advertisers and corporations have measurable tools to see if Super Bowl ads are still worth the price. So far, they think it does.
Norm Miller, University of San Diego
YES: Superbowl ads are watched repeatedly, via YouTube, for years, if they are clever enough. The fact that some brands will pay $7 million for 30 seconds is sufficient to prove expected value exceeds cost, especially for newer brands. At the same time, sometimes they are very funny, but we don’t remember the product, so they are useless. It appears that often ad agencies are trying harder to win awards (i.e. Reggie, Clio) than to really make us remember the product.
David Ely, San Diego State University
YES: There is no shortage of companies who are willing to pay a lot of money to air an ad during the Super Bowl. These organizations clearly believe that the potential to reach millions of viewers is worth the price. The payoff is likely sufficient to justify the expense for companies with entertaining and memorable ads that enhance brand awareness long after the Super Bowl. Companies with forgettable ads are likely wasting their money.
Caroline Freund, University of California-San Diego School of Global Policy and Strategy
YES: The price is market determined. Given the limited number of opportunities to reach 100 million potential customers, companies are willing to pay through the nose for them. Super Bowl ads also motivate creative teams, who can launch their careers off an iconic commercial. Whether hilarious or cringe-worthy, if ads touch a nerve, they make the product known. As the saying goes: “There’s no such thing as bad publicity.” The biggest risk is to be forgotten.
Haney Hong, San Diego County Taxpayers Association
YES: To the firms that pay. Notoriety is notoriety, good or bad. (For example, the people who don’t want Donald Trump elected, by the way, should stop giving him so much attention, because notoriety is notoriety.) Even if someone hates your advertisement, your ad hater still probably thinks you’re doing pretty well overall and should consider your product (and might pick it over a lesser known brand anyhow).
Kelly Cunningham, San Diego Institute for Economic Research
YES: Corporations determine the worth by buying advertising to the biggest, most watched television event of the year. Advertisers deem it worth spending huge amounts for the opportunity to be seen by a massive live audience of 100 million viewers, as well as the before and after attendant interest generated sometimes overshadowing the game itself. The continually increasing price and still selling out all time slots available indicate their high-risk, high-reward endeavor is well worth it.
Lynn Reaser, economist
YES: Last year viewership reached 115 million, and 29 of the past 30 most widely watched games have been Super Bowl events, reaching all ages and demographics. The ad’s purpose is either to build brand loyalty or introduce a new product. Paying $30 million a second can be worth it, especially with humor or celebrities. It must not lecture and be in good taste. Don’t fire gerbils from a canon.
Phil Blair, Manpower
YES: But only the advertisers know for sure. It seems an outrageous cost to us laymen, but due to the odd popularity of football there is no other way to get a message in front of millions of international viewers at the same time. Long run it will be interesting to see the effect social media has on these ads.
Gary London, London Moeder Advisors
YES: The answer is self-evident because advertisers pay the biggest rates of the programming year. There are more eyeballs on these ads than at any other time, not just because of the size of the audience, but also because there are viewers (and critics) only dedicated to watching them rather than the game. The broadcasting longevity beyond that one spot can last for months. This is a no-brainer.
Austin Neudecker, Weave Growth
NO: Beyond the exorbitant cost for a timeslot, quality ads are expensive to produce. For large brands in broadly relevant categories (alcohol, snacks, automobiles, financial institutions), brand-building efforts are part of huge marketing budgets to stay top-of-mind for consumers. Newer brands have bet on Super Bowl ads to gain notoriety but rarely see the investment pay off. I strongly prefer investing in channels where the customer acquisition cost is already tested and tracked.
Ray Major, SANDAG
YES: As crazy as it sounds, paying $7 million for a 30-second ad is worth it if done right. With a reach of 100 million people, pre-Superbowl teasers, post-game discussions, and speculation and anticipation of the best and worst commercials, these ads will certainly pay for themselves from a mind-share perspective. Even this week’s Econometer is helping to promote the Super Bowl — not quite as well as Taylor Swift, but still.
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