02. 03. 2017 Blog

Super Bowl LI: Is Your Ad a Waste of Money?

This Sunday, February 5, 2017, the New England Patriots and the Atlanta Falcons will battle it out on NRG Stadium in Houston, Texas to see who will claim the title as best team in the NFL.

While the game is a huge hit, some would argue that there is vastly more to the experience than just the sport. Of the 112 million people who watched Super Bowl 50 in 2016, at least some of them were there for much more than a football game: the commercials. Seemingly, everyone looks forward to them.


This year, companies will spend $5 million for one 30-second ad spot before, during and after Super Bowl LI. This is a slight increase from last year, where spots stood at $4.5 million per 30-seconds of airtime.


Before 1976, price increase for 30-second Super Bowl ads had never gone above $15,000 in any given year jump; however, between 1976 and 1977 ads increased $37,000 while viewership jumped up 16 million people. This trend continued-increased price for increased viewership-for just two years. In 1979, 30-second ads increased $53,000 while viewership decreased 8 million from the previous year.


People continued to shy away from Super Bowl Sunday until 1984, where the number of individuals watching the big game increased eight million people from 1983. Since the game’s beginning in 1966, 1991 to 1992 was the only year span that saw no increase in the price of ads ($850,000) despite an 11 million-viewer increase between the years.


While it doesn’t happen often, ad dips usually come after economic recessions or insane yearly jumps; however, there is no one specific reason for the price. From 1997 to 1998 commercial prices increased over $300,000 per slot, and jumped up $500,000 from 1998 to 1999.


Since 2000, however, the price per year has steadily increased between $200,000 and $500,000 per 30-second space nearly every year, with the only drop coming between 2005 and 2006. This dip, too, lined up with an economic recession.


But the real question is why do commercials continue to increase when viewership is steadily leveling off? The answer is simple: because companies are willing to pay for it.


CBS, ABC, NBC and FOX have monopolized broadcasting the Super Bowl and benefit largely from the revenue derived from ad prices. As long as buyers like Audi, Honda and Pepsi are willing to fork out $5 million for advertising space (Hyundai paid $15 million for a 90-second space this year alone), ad prices will continue to increase.


While the price seems outrageous, for these monster companies, a few million dollars for over 100 million sets of eyes isn’t a terrible deal. In 2016, according to Neilsen ratings, 54.3 million homes were tuned into the Super Bowl, discounting group parties and bars airing the game. Of the home TVs in use in the United States last year during the competition, 72 percent of them were tuned into the game, yielding an approval rating of 46.6.


To Budweiser, this directly translates to hundreds of thousands of dollars in profit sales, quacking making up for the price of the commercial itself.


But, to answer the original question: is it worth it? That answer isn’t so clear. Critics of the Super Bowl advertisement system claim that Super Bowl ads aren’t effective because their creators target their peers, not the average American. Some also say that, because of the money gamble, no risk-taking is done, making the ads boring in nature.


Whatever the reason, one thing is clear: big name companies are insistent on the fact that Super Bowl advertising is worth the millions of dollars it costs. And as long as these companies are willing to shell out the big bucks, broadcasting stations are sure to increase prices to unprecedented new highs.