Audi, Coca-Cola Amongst Companies Expected To Shell Out Money





Superbowl XLVIII - 2014 - LogoAccording to reports, a 30-second commercial during this year's Super Bowl is expected to cost $4 million.

The cost of a Super Bowl commercial has ramped up dramatically over the past 10-20 years. According to the Businessweek.com article that I have linked to below, a 30-second Super Bowl commercial cost $1 million in 1995. By 2000, thanks to the "dot-com" boom and the tremendous amount of cash floating around, the cost of a commercial had risen to $2 million.

This will be the first year that companies have had to shell out $4 million for a 30-second spot during the Super Bowl, and a number of companies, including Audi and Coca-Cola, are glad to pay it. Other companies who have been mainstays during previous Super Bowls have finally had to bow out, citing the non-existent or negative expected returns.

The ratings for the AFC and NFC Championship games were very strong this year, easily topping the numbers that were posted in 2013. Given the intriguing Super Bowl match-up this year (Seattle vs Denver), there is no reason to think that this year's Super Bowl won't have some of the highest ratings ever.

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Why are Super Bowl spots so valuable?

There are a number of reasons, including:

1) The sheer volume of people watching. How often can you advertise your product to 108.7 million people at once?

2) Nobody changes the channel during the Super Bowl. If you are hosting a Super Bowl party, are you going to flip through the channels during the commercials? Of course not. Besides, the commercials are a big part of the allure of Super Bowl Sunday.

3) The event is live and hardly anyone will record it and watch later. This is important - sports content has become SO valuable with advertisers in recent years due to the fact that people prefer to watch their sports live, rather than recording it to watch it later. Why is this important? It means that people won't be able to fast forward through the commercials.

4. The commercials themselves. People are hyper-aware of the commercials during the Super Bowl, moreso than during any other event. This allows the really memorable commercials to make their marks. In any other situation, the average viewer would zone out during the commercials, but not during the Super Bowl.

5. The group dynamic. See a memorable commercial? You can instantly discuss it with your group of friends that you are watching the game with. So, not only do commercials make an immediate impression, but the memorable commercials will continue to be discussed after the fact.

6. Social media. The social media phenomenon has allowed memorable Super Bowl commercials to gain even more notoriety as they are quickly shared and discussed through sites such as Twitter and Facebook.

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It is really any wonder why $10 million 30-second Super Bowl ad spots are projected inside of 30 years?

Source: Businessweek.com - Super Bowl Ad Insanity Explained in Six Charts




Filed under: General Knowledge

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