Super Bowl XLI: Do the ROI Numbers Add Up for Advertisers? Analysis Suggests that 75% of Expenditure is Wasted

Share Article

Does advertising in the Super Bowl really pay out? The minimum cost per :30 spot was up to $2.6 million, plus millions more for special commercial production, talent and promotion, totaling to a minimum investment of about $4 million. Despite its 42 rating, the 500% cost efficiency premium is so high that it is nearly impossible for the Super Bowl to match the consumer impact of alternative media choices receiving equal dollars.

Does Super Bowl advertising really pay out? Or is a sponsorship of the Super Bowl actually worth it? Following is analysis from the editors of the Thumbnail Media Planner:

A few months ago, the Association of National Advertisers (ANA) called for increased ROI and accountability for advertising. The ANA recommended reducing the use of television (because of its perceived declining effectiveness), along with greater utilization of non traditional media.

Yet, a cadre of elite advertisers just thumbed their noses at the ANA's recommendations by spending an estimated $200+ million on Super Bowl XLI activities (Bears vs. Colts), an investment which, in our opinion, has little (or no) chance of payback. At up to $2.6 million per :30, plus very expensive commercial production, talent, and promotion costs, the smallest total investment in the Super Bowl likely averaged around $4 million, while large sponsors shelled out a total of $20-30+ million.

Since companies have a fiduciary responsibility to shareholders to maximize the ROI of their marketing and advertising investments, we wonder if certain major investments like the Super Bowl are even evaluated from an ROI perspective.

Nevertheless, with emotion and egos set aside, what are some of the more important ROI related considerations for deciding whether to Super Bowl or not to Super Bowl. If there is no other information, Media Analysis 101 and common sense can help spot good and bad media investments. Here are some important considerations:

1. What is the total Super Bowl Investment? - The first step is to determine the total cost of the Super Bowl sponsorship. The time cost of $2.6 million per :30 may be only the tip of the iceberg. Why? Most advertisers also produce expensive new commercials brimming with special effects and celebrity talent to run in the Super Bowl (often costing $1-2+ million each). (And these spots sometimes run only in the Super Bowl.) Talent-wise, all of those celebrities in the ads come with avery high price tag. And finally, we can't forget the cost of promotions, POS materials, and other communications developed to leverage Super Bowl sponsorships.

2. Rating Size - Not Related to ROI - At least 90% of the discussion about the Super Bowl as a media vehicle is about its ratings (audience size). Duh, yes, the Super Bowl normally generates the largest audience of anything on the air -- a 41.6 household rating in 2007. That translates to each commercial, on average, going into about 42 million homes with 100+ million potential viewers.

But, so what? Reaching all those folks at the same time might make good media and cocktail party fodder, but, alas, the existing research finds no correlation between rating size and advertising effectiveness.

3. 500% Cost Premium Makes ROI Difficult - At the risk of offending some of you intuitive decision makers (who get riled at being reminded about what something costs), it is especially important to analyze the Super Bowl because of the magnitude of the investment and the cost premiums required.

For example, if we assume that the minimum average cost of a "sponsorship," is $4 million (including one :30 @ $2.6 million, production & talent & promotion), is a mere $4 million, the CPM homes would approach $100, about 500% more than first quarter prime time, plus we'll throw in a promotion. That simply means, to pay out, somehow, Super Bowl ad exposures have to be at least 5 times more effective than ad expsures in other quality media vehicles.

4. But People Watch Super Bowl Commercials! - True, commercials have become a Super Bowl attraction (despite being panned somewhat this year). But even if we assume that somewhere between 75-85% of the Super Bowl audience is paying full attention when "your" commercial comes on, compared to 70-75% for select prime time programs, the relative cost effectiveness of the Super Bowl remains little changed.

The implication is that, if the likelihood of ad exposure in the Super Bowl is similar to other quality media vehicles, given a 500% cost efficiency premium, at least 75% of the investment is wasted, i.e., that's $3 million out of a $4 million investment or $15 million out of a $20 million investment. Regardless, it's enough to turn old John Wanamaker over in his grave ("I know that half of my advertising is wasted, I just don't know which half.")

5. But Doesn't Advertising in the Super Bowl Environment Have More Consumer Impact? If we stopped our analysis here, we would conclude that the Super Bowl is overpriced by perhaps 300-500%. But is an ad in the Super Bowl environment so much more impactful or persuasive with consumers that it's worth the price? To address this question, we reviewed some of the recent research on Super Bowl advertising effectiveness which was conducted by credible advertising research companies Here is the summary:.

    a) Gallup & Robinson (G&R), one of the leading advertising research firms in the U.S. has continuously studied the effectiveness of Super Bowl commercials. In response to, "This Year's Super Bowl had some of the best advertising I've seen," only 7% strongly agreed, down from 21% in 2006. G&R concluded from their research that despite increasingly extravagant production values, they do not translate into motivating brand messaging. "Entertainment along does not move brands."

    b) Copernicus, another major market research firm, conducted studies, "Whether advertising during Super Bowl XXXVII was worth the investment." Based on their findings, Copernicus concluded that Super Bowl XXXVII was not worth the investment for many of the advertisers. Commercial popularity scores do not necessarily translate to impact, and while commercials may spark conversation at work the next day, the advertiser will probably not be remembered and the call to action will be subliminal, said Copernicus.

    c) Zyman Marketing Group published the results of their research in Z View, a whitepaper. Similar to the studies cited above, Zyman concluded that "fun" commercials are not necessarily the most effective. "…while fun advertising may entertain consumers and senior management, it usually won't add to you bottom line. On the other hand, if you're more interested in generating sales growth, you'd be wise to test the purchase intent impact of the creative concepts and final executions…"

    d) There are other studies, pro and con, on Super Bowl advertising effectiveness. The problem is that the research deals largely with the effectiveness of the commercials (fun, expensive, lacking in message), rather than the effectiveness of the medium (Super Bowl).

Conclusions

1. Does the Super Bowl provide a positive return on investment? It is nearly impossible to overcome a 500% cost efficiency premium. There is no evidence that commercials in the Super Bowl are somehow five times more effective than commercials appearing in alternative media.

2. Is the Super Bowl really a showcase of great creative? The Super Bowl has fostered a creative competition to see who can come up with the most entertaining commercials. But the research suggests that many commercials are devoid of strategy and motivating brand messages. The creators of much of tghis advertising appear to be so consumed with their cleverness that they have forgotten why we advertise to begin with.

3. Do advertisers have a fiduciary responsibility which extends to marketing investments? We believe that advertisers do have a fiduciary responsibility to their shareholders to maximize the ROI of all of their marketing investments, including those for ads in the Super Bowl. Using major investments as toys or making major financial decisions mostly by emotion is not responsible. Advertisers simply need to conduct their due dilligence as seriously with their advertising investments as they do in other areas of their business.    

4. Does this POV apply to media investments other than the Super Bowl? Definitely. Few companies are Super Bowl advertisers. The real point is that everyone should follow the ANA's recommendations and evaluate all of their major ad investments from an ROI perspective.

About the Author

Ron Geskey, CEO of 2020:Marketing Communications LLC, has over 30 years of senior account and media management experience at Leo Burnett, D'Arcy, Campbell Ewald and General Motors R*Works. He has a masters degree from Southern Illinois University, doctoral work at Texas Tech, and professional education at Northwestern, Wharton, and MSU.

About the Thumbnail Media Planner

Media technologies and information are moving at the speed of light. Understanding media has never been more important. Advertisers are demanding increased ROI. The largest TV advertisers recommend using more non traditional media-- due to their concerns that television advertising effectiveness is declining sharply. And many are concerned about the inexperience of many who are entrusted with investing billions of media dollars.

We Synthesize the Important Media Information for You-- That's why we publish the Thumbnail Media Planner-- to help ad agencies, advertisers, and media-- stay on top of key media trends and media costs. Every year we synthesize 100s of sources of media information into a convenient media planning & media buying pocket sized reference (104 pages in 2007).

The 2007 Thumbnail Media Planner provides advertising costs and data for all major national and local media, including eachof the top 100 markets. Contents include:

< Market Research: Population trends, market sizes, marketing and ad spending, efficiency benchmarks

< Television Advertising: Network, spot, cable television trends, including 2007 costs (CPP)

< Radio Advertising: Network and spot radio trends, including 2007 costs (CPP)

< Magazine Advertising: Data and page costs for over 70 top magazines in 17 categories

< Newspaper Advertising: Information and cost benchmarks

< Internet advertising: Trends and cost estimators for online advertising

< Direct marketing: Direct mail cost estimator and results benchmarks

< New Media: Dozens of Non Traditional Media "ideas"

< Local Market Advertising: Top 100 Market Planner, including population and average media costs by

market for spot television, cable radio, newspapers and out of home media

< Advertising Research: Heads up findings on latest media effectiveness studies & much more!

Reap the Benefits of Thumbnail Planning

We call it a Thumbnail Media Planner because that's what it is: a "short cut" planning tool created by a big agency media director to help you quickly do exploratory plans, quickly evaluate alternatives and new ideas, save time by discarding impractical ideas without zillions of hours of staff work, immediately answer many questions in meetings, and much more. Intelligent use of the Planner can save you and your staff tons of time while improving the quality of your work.

Ordering

There are three ways to order:

1. You can download PDF version now,

2. Order hard copies for you and your staff, or

3. Take your company to the next level with your own personalized Planners -- printed with your own name & logo!

###

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Visit website