This year's 30-second Super Bowl ads cost nearly $5 million — and the advertisers who paid for them broke into nervous shakes watching.
Inside sports business
There’s nothing like the pressure of competing on Super Bowl Sunday.
Yeah, the Denver Broncos and Carolina Panthers experienced some. But the guys really sweating it were the advertising directors of major companies spending nearly $5 million for every 30-second commercial during the CBS telecast.
Many of us laughed when singer Drake parodied his “Hotline Bling” hit with a “Restricted Bling” commercial for T-Mobile mocking data charges. Felt nostalgic when a “Commander” ad featured a retired astronaut blasting off again in an Audi R-8 to the tune of “Starman” by David Bowie. Perhaps sensed a cool factor injected into social consciousness when Toyota Prius’ “Heck on Wheels” depicted a responsible joy ride.
But none of us broke into nervous shakes watching. We hadn’t risked entire advertising budgets — and jobs — trying to resonate with 100 million television viewers.
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With Super Bowl commercials 120 times more expensive than the first one in 1967, it’s not enough to be cute like the mainstay Budweiser Clydesdales, or dachshunds dressed like hot dogs in Heinz’s “Weiner Stampede” spot. Unless pre-stated objectives are accomplished — or worse, if a commercial bombs and results in corporate ridicule — big spenders will be explaining themselves deep into next NFL season.
Richard Torrenzano, CEO of The Torrenzano Group, a New York brand building and protection firm, says rising costs are forcing companies to reconsider the benefits.
“How many of these ads do you remember?’’ Torrenzano said. “Do you remember even three from last year, except for maybe Budweiser? Most people can’t remember most of them and that’s the issue. You may get a lot of eyeballs, but this is a one-time event.’’
Besides ad time, there’s the cost of creating the commercial and coordinating staff to market it. Also, he says, of inviting clients to the Super Bowl to watch the commercial air.
By the time it runs, that 30-second ad might cost $20 million.
“You can probably get a lot more bang for your buck,’’ he said. “They can be spending it on social media, on more focused advertising on the Internet. All sorts of things.’’
The average Super Bowl ad cost jumped 9 percent from last year and 60 percent since 2011, according to Kantar Media. Super Bowl 50 commercials averaged $4.8 million — with some surpassing $5 million depending on time slot — compared to $40,000 for Super Bowl I.
The eyeball benefits are obvious: The game reaches 40 percent of American households, cutting across a vast chunk of the consumer spectrum.
Cost increases also are attributable to YouTube and other websites guaranteeing a longer shelf life for Super Bowl commercials. Commercials often are pre-released on Twitter, Facebook, YouTube and Instagram, maximizing value.
But winning at Super Bowl commercials involves defining the end goal.
Master Lock in 1974 became famous for blowing its entire annual ad budget on one “Shot Lock” sharpshooter spot back when Super Bowl commercials cost $107,000. Additional Super Bowl ads ran through 1996 — by then costing $1 million — helping Master Lock boost sales from $35 million to $200 million.
But Master Lock wasn’t aiming to have viewers race out and buy locks; only persuade hardware stores to carry its product. Upon maxing out on store distribution, it saw no need to keep being seen by millions of Super Bowl consumers it wasn’t directly targeting.
This generation’s version of Master Lock and one-splash Super Bowl ad success, the GoDaddy online domain registry, stopped a decadelong run of racy Super Bowl spots this year. The company says it achieved its goal of getting noticed domestically and resources are best deployed elsewhere.
Some behemoth companies run Super Bowl commercials mainly because they feel Americans expect to see the biggest and best participate.
But FedEx, which ran spots in 18 Super Bowls beginning in 1989, stopped after 2008 because it felt merely maintaining status at the big game sent the wrong message during a recession.
“As a country, we are in unprecedented economic waters,’’ FedEx’s national advertising director Steve Pacheco said at the time. “And as a responsible employer of more than 290,000 employees and contractors worldwide, there is a time to justify such an ad spend and a time to step back.’’
Coca-Cola and Pepsi are corporate giants that could be said to run Super Bowl ads merely for perception.
A Stanford University study last year found neither sees a marked sales increase from their competing Super Bowl commercials. The study of 55 media markets over six years of Super Bowls concluded the rival soft drink makers’ ads essentially offset one another.
Meanwhile, Budweiser, which pays for beer ad exclusivity at the Super Bowl, saw a 15.75 percent sales increase over competitors in the game’s immediate aftermath.
Brand builder Torrenzano argues there’s a place for Super Bowl spending within a longer-term, multifaceted strategy, which companies like Budweiser do attempt.
“You can’t just do it as a (single) transaction,’’ he said. “You’re better off taking that $10 million to $20 million and putting it into a prolonged marketing campaign.’’
That’s why, as Super Bowl ad costs increase, one-shot risks by smaller Master Locks and Go Daddys will become rare indeed. And daring ads, once the game’s signature, likely will yield to safer, family-themed content befitting corporations that simply can’t afford to make a mistake.