Super Bowl's price bubble

Published on .

Thanks in good part to strong demand from lemminglike dot-coms with money (and investors) to burn, the average price for a 30-second TV commercial on next Sunday's Super Bowl has leaped to $2.2 million.

That's a 37.5% increase over last year. And that's absurd. The question for advertisers is whether the Super Bowl still makes sense at its increasingly inflated prices. It may be time for a Super Bowl equivalent of a stock market correction.

In 1970, $100,000 bought an advertiser a 30-second spot that, according to Nielsen Media Research, reached 39.4% of U.S. TV households. In 1980, the price and household rating were $234,000 and 46.3%. In 1990, the price reached $700,000 as ratings fell to 39%. Last year, advertisers paid $1.6 million and reached 40.2% of households. (PR-savvy advertisers also got free airtime on TV shows that did segments about bowl ads.)

The Super Bowl has become a risky place to advertise: A marketer pays the huge fee to go up against a slew of other sponsors, each trying to break through the clutter with its own over-the-top spot. A couple of advertisers will break through with memorable, on-target commercials (last year, Monster.com's spot put that brand on the map). But a couple dozen others will waste millions frolicking in an overwhelming, forgettable commercial orgy.

The Super Bowl once was the blue-chip advertising event. The 1990 game, for example, was dominated by major brands from major marketers, including Budweiser, Coca-Cola and Pepsi; Chrysler, General Motors, Nissan and Toyota; AT&T and Sprint; and American Express, Federal Express, McDonald's and Nike.

While Anheuser-Busch Cos., FedEx, GM and Pepsi are back on this year's game card, increasingly marketers are questioning the return on investment and placing bets elsewhere. Dot-coms filled the void this year. Who will fill up next year's bowl if the dot-com bubble bursts? Of course, the time will get sold. But at what price?

It would be healthy to see Super Bowl ad prices stabilize. Advertisers can influence the price by remembering what's at stake. In a fragmented TV world, the Super Bowl telecast is one of the few "mass audience" events left. But at what cost to advertisers? Its value should be based not on emotion, not on the lore of bowl advertising, but on a hard analysis of whether it makes sense. For advertisers, the Super Bowl is not the only game in town.

In this article:
Most Popular