The Super Bowl’s Super-expensive Advertising: Does It Work?Published: January 15, 2003 in Knowledge@Wharton
For the advertising industry and millions of television viewers, the upcoming Super Bowl broadcast, scheduled for Jan. 26 in San Diego, will be a string of entertaining commercials interrupted from time to time by a football game.
More than 40 million people are expected to watch this year’s super-hyped championship contest and digest as many as 60 commercials along with their nachos, sour cream-onion dip and Buffalo wings. “This is advertising’s greatest moment. It’s when the light is shining brightest on advertising creativity,” says Rob DiGisi, a Wharton sports and entertainment marketing lecturer and president of Ironhorse Marketing Inc. in Wilmington, Del.
Super Bowl commercials have transcended their marketing function and are now viewed as a cultural reflection of America at a particular moment in time. During the height of the dot.com era, the ads celebrated young and irreverent slacker-millionaires; in 2001, just months after the terrorist attacks on New York City and Washington, D.C., Super Bowl ads took on a somber, patriotic tone.
The January 2003 ads could mark a return to normalcy, with advertisers using celebrities and humor to pitch the “necessities” of American life, such as cell phones, Trident gum and beer. Singer Willie Nelson, who settled a back-tax bill with the IRS in 1993, will be pitching for tax-preparer H&R Block. Singer Ozzy Osbourne will be touting Pepsi. Basketball great Michael Jordan and actor Jackie Chan will endorse a new line of tagless men’s t-shirts for Hanes. “This year [will] be more playful, somewhat more lighthearted. It would almost have to be,” says marketing professor David Schmittlein.
ABC, which is airing this year’s Super Bowl, has announced that more than 90% of the game’s airtime is already sold. The network negotiates deals individually with its customers, but analysts have estimated a 30-second spot is going for between $2 million and $2.2 million, up from $1.9 million last year. ABC is expecting to bring in approximately $140 million in ad revenues.
According to DiGisi, some of those estimates might carry an element of hype themselves. “There’s always an incentive to advertise on the high side. It makes it seem more in demand from the seller’s perspective. And the buyers like to keep the hype about the price of the ad so it seems like they’re getting a deal for less, which makes them look good to their bosses and their clients.” DiGisi estimates a fudge factor of 5-15%, noting that it is well worth it for many companies to pay the 30-40% premium in ad rates for Super Bowl airtime.
After all, as Schmittlein points out, the Super Bowl is a unique opportunity in advertising. “There just isn’t another television event that occurs regularly with that number of eyeballs in the same place at the same time,” he says. To reach the same number of people on any other day advertisers would throw away ad dollars on people who have already seen their spots. “You can waste tons of money with repetitive exposure.” The Super Bowl, however, is not a venue to pump up short-term sales, Schmittlein adds, noting that the event is usually used by companies as part of a broader advertising strategy.
Advertisers often believe they need to have a Super Bowl presence to establish themselves as an industry leader, Schmittlein says. “If you are perceived as the industry leader and you are not in the Super Bowl, people might ask, ‘Why not?’” Some companies will pay extra to negotiate an exclusive contract making them the only one in their industry to advertise during the Super Bowl.
It’s not just consumers who are targeted by Super Bowl ads, Schmittlein notes. Companies also target other viewers who could have an impact on their business, including salespeople and their own employees. “Making your employees feel they are working for the best company in the industry may be better achieved through the Super Bowl than with a longer company newsletter,” he says.
According to Wharton marketing professor Len Lodish, certain companies advertise during the game to draw the attention of wholesalers and trade customers. “When combined with other events, it may be useful for getting your distribution channels behind your product,” he suggests. For example, Schmittlein and DiGisi point to Master Lock, which for several years devoted its entire advertising budget to the Super Bowl. Master Lock was not out to reach consumers: It was out to reach hardware-store owners to get better shelf space.
And some companies, Schmittlein adds, play defense during the Super Bowl: “There is a lot of … paranoia that if you’re not going to advertise in your product category, then the field is wide open for your competitors. Maybe you don’t have a great idea to use the Super Bowl to your advantage, but you’re afraid your competitor will and you don’t want to give them a free pass.”
Communal viewing of the broadcast by groups or families at parties creates another unusual opportunity for advertisers, he says. “With a social setting that includes multiple families, there is more potential for word of mouth to take place all at once.” Finally, he adds, there has been so much attention paid to the commercials themselves that people turn on the game prepared to focus on the ads.
But the Super Bowl is clearly not for everybody. “Many companies have wasted a lot of money over the years, especially the dot.coms,” Lodish points out, noting that dot.com companies that spent millions to advertise on the Super Bowl did not have the sales – much less the profit – to justify doing so. “It made no sense for companies operating on such a small scale to advertise” there.
From a creative standpoint, Apple’s 1984 ad introducing its Macintosh computer – featuring a young woman in shorts and headband throwing a sledge hammer at a big-brother-like face – still stands out in Lodish’s mind as the Super Bowl’s greatest play, while Budweiser has been successful in using light-hearted Super Bowl ads to remake its image. “The ads with the frogs and ‘Wassup’ works with the target audience,” he notes. “Bud used to have an old stodgy image. Now it’s cool to drink Bud.”
According to Wharton marketing professor Lisa Bolton, advertisers use the Super Bowl to build brand equity, which has two key components: awareness and association. “With the Super Bowl there’s a lot of competition for [viewers’ attention], so the ads have to do a good job of cutting through the clutter,” says Bolton. Sometimes ads are too successful in drawing attention to themselves. “They build awareness for the ad and people forget the brand. That can be a danger if an ad is too clever in its execution.”
This happened to some companies during the dot.com era of Super Bowl advertising. “People may have remembered the advertisement, but couldn’t connect it to the brand.” To build positive association, marketers need to convey a message about the core values of their company and its products if they are to capitalize on Super Bowl visibility, Bolton notes.
Companies have had mixed results in trying to build an association, she says. “Obviously some ads do well and get positive buzz, but some ads are trashed in the media or around the water cooler the next day. In that case, a negative association is attached to the brand.”
To get the most yardage out of Super Bowl advertising, companies should consider whether their products are a good fit with the games’ audience – largely men between the ages of 30 and 50, Bolton suggests. “Is it the kind of brand that will appeal to those demographics?” There may be a better payoff for advertisers if they use the Super Bowl to introduce a new campaign and back it up with additional ads. “That’s where you get your impact over time.”