Would you spend $4 million to be “Liked” for 30 seconds?

Posted on January 25, 2013, on www.YPtalk.com

The big game is set. Super Bowl XLVI will be on CBS next week featuring the San Francisco 49er’s vs. the Baltimore Ravens. And Americans are going to love it. But you already know all that.

The raw dollars spent in the United States for the big game by the public, by teams and by advertisers will be an astronomical sum when you start to add it up. But is it really worth it for advertisers?

Some factoids: Superbowl-ads.com indicates that Super Bowl TV ads are selling for up to $3.8 million on average for the 30-second spots, but CBS reportedly has already sold out rumors are any remaining spots can be had more than $4 million, for a single 30-second spot. That average is up by $300,000 from the $3.5 million published rate for the 2012 Super Bowl. Advertisers that we will hear from are: Anheuser-Busch, AXE, Best Buy, Cars.com, Century 21, Coca-Cola, Doritos, Fiat, Ford/Lincoln, GoDaddy.com, Hyundai, Kia, Kraft’s MiO, Mars, Mercedes-Benz, Milk Processor Education Program, Paramount, PepsiCo, Skechers, SodaStream, Taco Bell, Tide — Proctor & Gamble, Toyota, Volkswagen and Wonderful Pistachios. If we just take 35 ads, this comes to roughly $133 million spent by advertisers at the $3.8 million average. Note to readers: do any of those names spend money in print, online, or mobile Yellow Pages??

The Nielsen Company showed that the broadcast of the prior Super Bowl on NBC had an average audience of 111.3 million viewers and was said to be the most-watched television program of all time. The game was viewed in roughly 53.3 million households, with a 47.8 U.S. household rating.

It will probably not surprise you to know that American adults like watching Super Bowl commercials just as much as game itself. According to a survey released by Chicago-based market research company Lab42, some 39% percent said the commercials were their favorite part of the game while only 28% said watching the football game was their primary interest. Stuffing ourselves with food, and the halftime show were No. 3 and No. 4, respectively.

“The commercials are great for all kinds of consumers to engage with the Super Bowl regardless of whether their team is playing or not,” said Lab42 CEO Gauri Sharma. “It’s very interesting that 64 percent of the respondents said half or more of their conversations with respect to the Super Bowl were about the commercials.” (Source)

So shouldn’t that be good news for those advertisers shelling out the average of $3.8 million for a 30-second spot? You will see that there will be lots of talk about “engagement metrics”, re-tweets on Twitter, “Likes” on Facebook and clicks on everything else, but I have rarely seen any of that correlated to sales. While measuring digital audiences is easier because there’s a ton of data attached to it, the question rarely asked is, what is it that’s being measured, and why? The keyword missing is “ROI”. I even found this little gem from an Ad Age article five years ago:

“Ten years ago you looked at Nielsen numbers and then day-after recall,” said Kate Sirkin, exec VP-global research director, Starcom Mediavest Group. But now it’s about more than just eyeballs. “You can look at online buzz, online traffic, people talking about your brand and searching online.”

$4 million for some “buzz”??

Sure, Super Bowl ads are entertaining. Who doesn’t remember the epic, breakthrough Apple “1984″ advertisement for the Macintosh that only ran once. This year’s crop will feature things like a Kia ad for the Sorento SX Limited crossover SUV shows toddlers and baby animals rocketing to Earth from outer space.

So who is making money from Super Bowl ads? The TV network running the game. Sport Business Daily said that over the last 10 years, the Super Bowl has generated $1.72B of network TV ad sales from more than 125 marketers, according to data from research firm Kantar Media. From’02-11, A-B InBev, PepsiCo, GM, Disney and Coca-Cola were the top five advertisers and accounted for 37% of all Super Bowl advertising during that time frame. The average rate for a 30-second spot during the Super Bowl has increased by 40% during the past decade, reaching around $3.1M last year on Fox and closer to $3.5M this year on NBC. Listed below is a trend for the average cost of a 30-second spot during the Super Bowl, along with total ad spend for the game (compliments of Kantar Media).

’11 Fox $3.1M $227.9M
’10 CBS $3.0M $205.2M
’09 NBC $3.0M $213.0M
’08 Fox $2.7M $186.3M
’07 CBS $2.4M $151.5M
’06 ABC $2.5M $162.5M
’05 Fox $2.4M $158.4M
’04 CBS $2.3M $149.6M
’03 ABC $2.2M $130.1M
’02 Fox $2.2M $134.2M

Beyond CBS, the other big winners will be (per 24/7 Wall Street.com)

The Superdome: As of Tuesday 1/22, the lowest priced ticket on the Ticketmaster website was $2,387, and the highest priced ticket was $13,120. Stubhub listed tickets starting at $2,119 per ticket. Regular football game seating at the Superdome accommodates about 69,700. Even just at the base price, and averaging the lowest ticket prices seen, this comes to $2,253 for an average entry-level ticket. If all 69,700 seats averaged this, the tally comes to just over $157 million. However, remember that The Superdome has undergone $336 million in renovations since Katrina, followed closely by $300 million in improvements to Louis Armstrong International Airport.

Chicken wing sellers: According to the National Chicken Council, Americans will eat some 1.23 billion chicken wings over Super Bowl weekend. This is projected to be down about 1% from a year ago, but the drop is due to prices impacting production rather than demand. Wholesale wings are currently at about $2.11 a pound (in the Northeast), up 26 cents or 14% from a year earlier.

Pizza companies: the Super Bowl is by far the busiest day of the year for pizza sales. Figures from 2012 showed an expected 4 million pizzas being sold by restaurants alone. That is not counting the frozen pizzas from grocery stores nor the diehards who make their own pizzas from scratch. Statistic Brain said that Pizza Hut sold 2 million pizzas during the Super Bowl in 2012. Domino’s delivery drivers are expected to log about 4 million miles on Super Bowl Sunday.

Beer/wine/booze in general: Saveonbrew.com had an infographic for the 2013 Super Bowl showing the following: 50 million cases of beer will be consumed, resulting in more than 2 billion gallons of water being needed latter to flush away the beer consumed. The other downside is that roughly 7 million people will be calling in sick after the Super Bowl because they are hung-over.

The city of New Orleans: The New Orleans Metropolitan Convention and Visitors Bureau were quoted as saying that the Super Bowl will generate $300 million to $400 million in direct spending. The New Orleans Tourism Marketing Corporation said that the Super Bowl is expected to have a $432 million economic impact on the city.

Not broken out in these cool stats are of course, Yellow Page advertisers, as many of them will benefit from those looking for those wings, pizza’s, liquor stores, etc. etc. etc. The good news for them is that they aren’t spending $4 million to be “liked” and their print, online, and mobile Yellow Pages advertising programs will continue to be work for them 24/7/365 long after the 49er’s have crushed those pesky Ravens….