The Super Bowl is known for two things. A championship football game and the greatest show in advertising. Many large brands spend millions for commercial slots, and many more millions producing a commercial for the Big Game. The numbers can sound like Monopoly money, leaving many to question the value of spending so much money on a single run of a commercial. To understand the economics of a Super Bowl ad vs a local tv ad, let’s break down some of the key components of a good advertising campaign.
Reach: How many potential new customers are you reaching?
The Super Bowl is the highest-rated television program in America with nearly half of the US population tuning in. This offers an unprecedented opportunity to reach the masses. The question is if your brand would benefit from reaching the masses. For example, if you are a premium luxury brand that wants to reach homeowners earning over $200k/year, then the Super Bowl may not make sense since you will be reaching a lot of individuals outside of your target customer profile. This is why you see many mainstream brands advertising in the Super Bowl – it’s actually an effective way for them to make a splash when the viewership profile mirrors their customer base. Niche brands or B2B brands are generally better served with targeted Connected TV advertising.
For example, if you are a mainstream brand where 75% of the viewing audience fits your target customer profile, and are spending a CPM (cost per 1,000 impressions) of $45 on a Super Bowl commercial your effective CPM is $45 / 0.75 = $60 effective CPM. If only 25% of the viewing audience fits your target customer profile, then it’s a $90 effective CPM. So you can see, how the economics change for niche brands. If you advertise on Connected TV and can isolate only your target customer profile to see your commercials, you’ll pay closer to an average of $35 CPM.
Frequency: How often are your potential customers seeing your ad?
The old adage is that a consumer needs to see your ad an average of 7 times before they take action. The Super Bowl generally gets you one ad view, albeit at a higher impact. This makes the Super Bowl great at making a splash, which is why you see advertisers invest a lot of resources into producing a memorable ad. But in terms of long-term brand building, the impact of these ads does fizzle quickly over time. Hence, brands that advertise at the Super Bowl should also have a thoughtful, sustained advertising plan to build on whatever momentum they generate.
Message: Are you persuading new customers?
It’s no secret that brands invest in high-dollar production for their Super Bowl commercials. Celebrities, special effects, big-name directors, and more can drive the cost of a 30s Super Bowl ad to rival the production cost of a feature-length film! Brands do this because they want their ad to be remembered long-term. Every year, as I watch the Super Bowl, I always pay close attention to which brands use creativity to highlight a key point of distinction to persuade new customers. There are far too many brands that make funny commercials that don’t build a brand’s equity, and to me, these are wasted dollars. The key, whether you are spending a lot on production, or running a virtual production shoot, is to ensure that your commercial highlights the most important points of difference you offer to your target customer.
In summary, Super Bowl ads can pay out economically. But like all advertising, the purpose of the ad MUST tie to a business strategy and a marketing strategy and cannot be done in isolation. Looking at Reach, Frequency, and Message, you can assess if the Super Bowl is an efficient, or inefficient means of reaching your target customer when compared to local TV ad costs. To learn more about how Connected TV advertising is an affordable means to pinpoint your target customer, get in touch with the experts at Awarity.