Sunday, December 5, 2010
Super Bowl advertising is risky business
Under Armour shares were pummeled after the company announced advertising buys that would hamper earnings, including a commercial during Super Bowl XLII costing about $5 million. Garmin received publicity for its Super Bowl spot — the wrong kind. Northwestern University’s Kellogg School named Garmin’s commercial (which cost $2.4 million to buy) the worst among scores of Super Bowl ads broadcast.
Despite all the hype about their creativity and an ability to reach television’s largest audience (93 million viewers) annually, Super Bowl commercials are risky ventures. Millions of dollars are dropped in less time than breaks between NFL plays, and the result may be viewers’ yawns and media pans. Which makes one wonder: Considering all the major sporting events during the year, isn’t there a better way for companies to spend their ad money?
True, certain sports events don’t really lend themselves to commercial buys. For instance, the Kentucky Derby on ABC draws nearly 14 million viewers, but it lasts only two minutes and no spots appear during the horse race. In golf, The Masters — broadcast by CBS — limits commercials to a handful of sponsors.
But other marquee matchups offer solid opportunities. During the 2007 World Series sweep of Colorado by Boston, Fox received about $400,000 for each 30-second commercial and attracted roughly 17 million viewers per game, a better deal than the Super Bowl in terms of cost per viewer. The upcoming Daytona 500 is drawing about $550,000 to $575,000 for each 30-second commercial, with close to 20 million viewers likely for the Fox broadcast, again a better bargain. How about a major PGA Tour event, where the average price for a 30-second spot is less than $200,000 and companies can reach the coveted male demographic with six-figure incomes? Spreading millions of dollars across half a dozen other major games, races and the like can make more sense.
The unrivaled exposure of Super Bowl ads means a commercial that alienates can heavily damage the sponsoring company. In the past decade, ads have been lambasted for being everything from racist to homophobic to inappropriate. Particularly at risk is a company making its advertising debut during the game in hopes of establishing a national reputation. It can be battered if the commercial lands short of the standard that has been established. And the high stakes of the event mean agencies can take the fall for a bad ad. For instance, Cramer-Krasselt resigned from the CareerBuilder account after ads failed to make USA Today’s Top 10 Super Bowl commercials.
Not only are Super Bowl ads expensive to purchase, they are often pricey to produce. Audi told USA Today it paid anywhere from $500,000-$1.5 million just for the right to use “The Godfather” imagery in this year’s ad. Anheuser-Busch shoots more than twice as many commercials as it uses and then spends money to test them in focus groups around the U.S. Well-known celebrities who appear in Super Bowl ads, such as Justin Timberlake and Carmen Electra, demand a premium fee.
The Super Bowl hasn’t always been the ad showcase it is today. The Apple commercial “1984” a quarter-century ago helped focus viewers’ attention on the spots. According to Michael MacCambridge, author of “America’s Game” about how pro football became the country’s most popular sport, the Super Bowl game in Pasadena 15 years ago changed everything.
”I think Super Bowl commercials became more prominent around the time that the NFL decided to add A-list pop stars to the halftime entertainment — with Michael Jackson performing at Super Bowl XXVII in 1993,” he said. “Emphasizing the halftime show ensured that the game would transcend sports; it took the largest TV audience of the year, and made it even broader and younger, setting the stage for commercials that would make news on their own terms.”
Companies such as Anheuser-Busch — which buys so many commercials every year that it pays only about $2 million for each 30-second spot — have become synonymous with the Super Bowl. Because of its over-the-top Super Bowl presence, the brewer has earned value just from the fact many fans assume Budweiser is the official beer sponsor of the NFL (it’s not — Coors is). And in the day of the Internet, ads will be watched online millions of times after the game, so their life, and thus impact, is seemingly limitless today.
Still, Super Bowl ads are a roll of the dice. And, if God forbid a game breaks out between the ads, and Eli Manning throws a last-second touchdown pass to shatter a New England perfect season, who’s going to talk about a Kraft commercial the next day? Spreading the risk among a number of prime sporting events may be the smarter move.
By David Sweet