Tuesday, January 30, 2007

Countdown to Kickoff -- At $2.6 million, there had better be a big bang for your Super Bowl buck

CBS has been selling 30 second commercial spots for Sunday’s Super Bowl XLI for $2.6 million. If CBS managed to sell their complete commercial inventory for the game (47 minutes or 96 spots) CBS would generate $244.4 million.

It’s not quite as easy as it would appear. Firstly CBS commits a fair percentage to promote their network programming (in a typical Super Bowl, one-fourth of all commercial time is a plug by the network for its own programming. The value of that air time in 2006 alone exceeded $52 million), there’s the commitment to local programming and CBS has yet to sell out their available inventory. Nonetheless Super Bowl Sunday remains the biggest single advertising day of the year. And why? In an increasingly cluttered media universe, the Super Bowl remains the highest rated TV program every year and more importantly the offers the highest guarantee in the industry, you’ll reach an audience.

The average cost of a commercial for the 2000 Super Bowl cost between $2.1 and $2.2 million. It may have been seven years ago, but the 2000 Super Bowl represented the beginning of the end for the tech boom (at least the first internet driven economy). Among the dot.com’s that rolled their financial future on a 30 second Super Bowl spot: Monster.com, HotJobs.com, Pets.com, OurBeginning.com, Oxygen Media, Kforce.com and Computer.com. Online brokerage firm E*Trade sponsored the half-time show and purchased numerous spots during the game.

OurBeginning.com's chief executive Michael Budowski (the website and Mr. Budowski are no longer online) told the media seven years ago that he was spending about $4 million of his $15 million 2000 marketing budget on the Super Bowl.

"If we wanted to catapult ourselves to the forefront and shorten the branding curve, the Super Bowl represents the ultimate opportunity," Budowski said. "We researched different media buys, and we realized that the Super Bowl is really the only media buy throughout the year."

Given that OurBeginning.com, Oxygen Media, Kforce.com, Lifeminders.com and Computer.com (and that’s just a few) are no longer operating, the 2000 Super Bowl was an advertising disaster of Titanic proportion. 17 dot.com’s advertised during Super Bowl 2000 a clear understanding of what was wrong with the first dot.com boom – those involved didn’t understand the industry they were a part of.

"People are in a different place with their Internet experience and understanding of the dot com world," said Anne Hollows, senior vice president of global brand strategies at Monster.com seven years ago. Her company saw its traffic spike about 450 percent after the game last year. "I would be surprised if we see that kind of a surge this year--the novelty has worn off," she said.

Monster.com is still around, but no longer a part of Super Bowl Sunday. As of Monday night only one dot.com, careerbuilder.com will be a part of Super Bowl XLI. Careerbulder.com have purchased two thirty-second spots one in the second quarter and the other in the third quarter. Godaddy.com is back once again this time with three spots and salegenie.com will be a first time advertiser at Super Bowl XLI.

The historical numbers linked to Super Bowl advertising is mind-boggling. According to TNS Media Intelligence, advertising during the Super Bowl game has accounted for 682 minutes – over 11 full hours – of commercial time throughout the past 20 years (1987-2006). Those 11 hours represent 221 different advertisers, more than 1,400 commercial announcements and translate into $1.72 billion of network advertising sales.

The top five Super Bowl advertisers of the past 20 years have spent $613.4 million on advertising during the game, accounting for 35 percent of total advertising dollars spent in the game. Anheuser Busch and Pepsico, advertisers in every Super Bowl game since 1987, continue to lead the pack, followed by General Motors and Time Warner.

While last year’s report (covering 1986-2005) listed FedEx Corporation as the fifth top advertiser, the company was replaced in this year’s report (covering 1987-2006) by Walt Disney. This is especially interesting as FedEx Corporation has advertised with the Super Bowl for 19 years, while Walt Disney has only advertised with the Super Bowl for the past seven years.

Each year, about 62 percent of the network TV ad money invested in the game comes from incumbent marketers who ran commercials the previous year. The major exception to that was the 2000 Super Bowl

“While that’s a very high retention rate, it’s actually lower than the comparable rate for two other showcase TV events. Over the past 10 years, the average dollar retention rate has been 78 percent for the Academy Awards and 67 percent for the World Series,” said Jon Swallen, senior vice president of Research at TNS Media Intelligence.

The cost of an advertisement in the Super Bowl has more than quadrupled in the past 20 years, reaching $2.5 million in 2006 for a 30-second unit. For the 2007 game, CBS is reportedly fetching over $2.6 million for each 30-second spot.

The biggest single advertiser for Super Bowl XLI is Anheuser-Busch. The beer company has purchased 5 minutes or 10 spots. If AB didn’t get a discount for buying as many spots as they did, they’ll be writing CBS a check for $26 million.

"It's fragmentation-proof, or least fragmentation-resistant," said Jason Maltby, president of national broadcast for MindShare, a media-buying firm owned by WPP Group. "You are reaching almost 1 out of every 2 Americans. Nothing else in any media even comes close."

In addition, "there is a much higher level of attention and engagement with the commercials," he added in a marketwatch.com report

The real question remains – does it make sense to invest in a Super Bowl spot?

"It's a much, much bigger risk than it is reward pay-out," Julie Roehm, the former communication's chief at Wal-Mart Stores Inc., said at a Reuters Newsmaker event in New York.

To make the multi-million dollar commercials worthwhile, marketers need to look to tie-in advertisements, such as using the same character or theme on an Internet campaign.

"It's not worth it if you just look at the numbers," said Jon Bond, Co-Chairman of advertising agency Kirshenbaum Bond + Partners. "You've got to have something I'll call the 'X factor'."

Joann Ross, president of network sales for CBS (hosting this years ago and knowing they’ll be televising the game in three years time again) needless to say is a big believer in the power of Super Bowl advertising.

"The Super Bowl is the one event where people do pay ... more attention to the commercials," she said. "The recall of the commercials is greater than spots that don't run in the Super Bowl."

Ryan Schinman, CEO of Platinum-Rye Entertainment agreed.

"I look at the Super Bowl as a big, almost, premier," Schinman said. "The Super Bowl, like the Academy Awards, is something special."

The Super Bowl is the one event that transcends sports. Ross is correct in suggesting it’s the one event people take the time to watch the commercials. One interesting feature to this years’ cavalcade of Super Bowl spots – most if not all of the spots will be available at youtube.com immediately following the game Sunday night. Ironically while the biggest disaster in Super Bowl advertising history was the dot.com 2000 Super Bowl debacle, seven years later the internet offers Super Bowl XLI advertisers an opportunity to leverage their $2.6 million 30 second investment.

As well Doritos and the NFL Network are among the advertisers who are actually allowing their customers to create what ad will run. A total of four Super Bowl XLI spots collectively worth $10.4 million will air Sunday.

"User-generated content is the hottest concept in marketing today," said Fran Kelly, president of ad agency Arnold Worldwide. "Trying an idea that people are going to talk about and look forward to seeing during the game is using the Super Bowl the right way."

"You're trying to get people engaged, and it's hard to argue that they're not engaged if they're actively involved in the making of the commercial," said John Condon, chief creative officer of ad agency Leo Burnett USA in a Cnet.com report

Amateur advertising videos have been around for a couple of years. Shoe company Converse was the first to run television ads created by customers. The concept was developed in 2004 by Butler, Shine, Stern & Partners, the Sausalito ad agency. The 24-second Converse videos were exhibited on www.conversegallery.com, in addition to television.

"What marketers are increasingly finding is that they can't control it,'' Stern said.”And, in fact, letting go and ceding absolute control is a major part of this new marketing model.''

And at the end of the day what matters most – regardless of whether or not your ad has been put together as part of Ted Mack’s Amateur Hour (an old TV program) or offers the creativity of some of the legendary Super Bowl spots of yesteryear, the spots better stand and deliver.

"You have to create spots especially for the game and that can double the price. You have to pay $2.6 million or so to get in the game and to produce a spot could easily cost you another million or two," said Fran Kelly, president and chief executive officer of Arnold Worldwide, a leading advertising agency. "It is a challenge for marketers. If you wind up with one of the poorly rated commercials you wonder if it's worth the money."

Anheuser-Busch’s will focus on fun and entertainment this year, moving away from their series of post 9/11 spots that featured ads with a patriotic theme. AB will also be using the internet to help get their message out. With 10 different spots on Sunday’s telecast AB will allow fans to vote for their favorite Anheuser-Busch spot on the companies website and encourage fans to use their cell phones to text message their favorite.

“What you have to recognize is where the consumer’s going,” said Robert Lachky, executive vice president for global industry development and chief creative officer at the Anheuser-Busch division of Anheuser-Busch in a New York Times report.

“Half the people in the United States watch the Super Bowl, but half don’t,” said Steven R. Schreibman, vice president for advertising and brand management at Nationwide Financial. “How do you reach them?”

“The Super Bowl is the only media property where the advertising is as big a story as the content of the show,” he added, “so you want to see how much you can leverage it.”

Garmin, a maker of G.P.S. navigation devices made it clear to The New York Times they couldn’t be more excited about their first chance to be a part of a Super Bowl game. There 30 seconds of fame is set for the second quarter.

“To look at the Super Bowl as ‘30 seconds and gone’ was never a part of the plan,” said Jon Cassat, director for marketing communications at Garmin. “We think a great audience out there responds to traditional media like television,” he added, “and we think there is a great audience out there we will reach through viral means.”

“It’s not right for everyone,” said Tim Calkins, a professor of marketing at the Kellogg School of Management at Northwestern University.

“Some of them, you scratch your head,” he added. “In the hype of the Super Bowl, they get carried away.”

But for “the right marketer, the Super Bowl makes wonderful sense if you think of it as a springboard to other things,” Professor Calkins said, adding: “Put the ads on the Internet. Get all the P.R. you can. Make the most of your media investment.”

Several of the websites who plan on streaming the Super Bowl commercial inventory immediately after the game ends are selling sponsorships for their post game Super Bowl connection.

According to a report in The Wall Street Journal; USA Today's Web site and Viacom Inc.'s IFilm site have both sold pre-roll ads on their Super Bowl poll pages, while Time Warner Inc.'s AOL has sold advertising for its viewer poll. Google Inc.'s YouTube, which is mounting a Super Bowl poll for the first time this year, is offering advertisers in the big game the chance to buy marketing packages aimed at reinforcing the message of their Super Bowl spots on the video-sharing site.

"Super Bowl ads have taken on a life of their own," says Neal Scarbrough, editor and general manager of AOL Sports. "When folks see these big numbers, they go, 'You know, you think we can advertise there.' "

For example, traffic to IFilm increased 157% during the week after the Super Bowl to 2.6 million unique visitors from 1 million the week before, according to Nielsen/NetRatings, a Web monitoring company.

"Ten years ago you looked at Nielsen numbers and then day-after recall," said Kate Sirkin, exec VP-global research director, Starcom Mediavest Group. But now it's about more than just eyeballs. "You can look at online buzz, online traffic, people talking about your brand and searching online."

And that is the bottom line;’ if you’re spending $2.6 million for a 30 second commercial spot not only had that commercial be outstanding but it’s essential that you look to leverage that opportunity in as many different ways as possible. Advertising remains what it has always been, you’re selling an intangible, and you hope you’ll reach an audience but you’re never quite sure.

For Sports Business News this is Howard Bloom. Sources cited in this Insider Report: The New York Times, CNNmoney.com, AdAge and Marketwatch

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