January 29, 2018 Katherine Haas

A Look at Super Bowl Ad Spending

Super Bowl advertising is a curious phenomenon. For 364 days of the year, television viewers tend to shun commercials. We mute them, we fast forward through them, or we avoid them altogether by consuming our programs on streaming services like Netflix and Hulu. But for one day of the year when the two top teams in the NFL face off, people are glued to their televisions, many of whom care less about the game than they do about the commercials in between plays. The Super Bowl is the world’s most valuable sports event, and this year’s Super Bowl ad spending promises to be some of the most lucrative to date.

More than 100 million Americans tune into the Super Bowl every year. This year, the average cost of a 30-second ad during the Super Bowl will be more than $5 million. Compare this to the first 51 Super Bowls, over which time the average cost of a 30-second commercial increased from $300,000 to $5.13 million.

Despite the high costs, the return for advertisers over the years hasn’t been as lofty. That’s because the costs for Super Bowl ads are still increasing, despite the fact that fewer people are watching than just a few years ago.

Traditional television viewership is down as ad-free streaming services are taking over. According to eMarketer, 22.2 million cable accounts were cancelled in 2017—a 33.2 percent increase from the year before. In addition, Netflix now has more subscribers than cable. One might suspect that live, annual events like the Academy Awards and the Super Bowl are an exception, but Super Bowl viewership declined in 2016 and 2017.

So is the $5 million price tag worth it? If you have the money to burn, then probably. The Super Bowl is such a unique advertising event that you can’t really compare it to anything else. People who never watch commercials are not only watching, but they are tuning in just to watch. They are discussing them with their coworkers the next day in the office, and they are re-watching them as the ads go viral—on Facebook, YouTube, Twitter, etc.

Ironically enough, the advertisers that get the most mileage out of Super Bowl ads are the ones who can least afford it. That’s because these are companies advertising products or services that most people have not yet heard about, and the Super Bowl is their platform to do so.

Delving further into the science behind Super Bowl ad spending, consider these stats:

  • The 2017 Super Bowl saw an audience of 111.3 million people in the United States, which was the smallest TV audience since 2013.
  • Total TV ad spending for Super Bowl LI and its pre- and post-game segments was more than $500 million, which represented a 14.52 percent increase over the 2016 Super Bowl.
  • Super Bowl LI accounted for about 2.3 percent of all U.S. broadcast network TV ad spending in 2017.
  • The total length of air time for ads in last year’s Super Bowl was 51 minutes, 30 seconds. This made it the second-most ad filled game in history after the 2013 Super Bowl, which had 51 minutes and 40 seconds of commercials.
  • The price per second for a Super Bowl commercial in 2017 was $166,667.
  • The advertising cost per rating point during the game has increased from $7,299 to $113,245 since the Super Bowl’s inception.
  • The advertising dollars spent per viewer has increased from 50 cents to $3.82 since the first Super Bowl.
  • The average cost of a 30-second ad in Super Bowl I was $40,000 ($294,000 adjusted for inflation).

Though the response to traditional TV advertising is generally waning as fewer and fewer people are watching network TV, the Super Bowl’s influence on advertising still stands strong. While Super Bowl viewership has slightly decreased relative to other games, Super Bowl ad spending exists in a niche all its own, making it somewhat the exception to the rule—at least for the time being.

McNutt & Partners is a full-service advertising agency with a specific focus on technology, digital marketing and digital advertising. Reach out to us at 334-521-1010 or visit our contact page.

 

 

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