Super Bowl suckers.

Super Bowl suckers.

Super Bowl suckers.

Gossip, speculation, and scuttlebutt about politics.
Feb. 8 2005 8:23 PM

Super Bowl Suckers

Buying an ad on TV's most-watched event makes no economic sense.

1_123125_123102_2111732_2113013_050208_tombrady

Psst! You didn't hear this from me, but buying commercial time on the Super Bowl is a waste of money!

Before proceeding, you should know that I am not a football fan—not even a fair-weather one. I don't have anything against the Super Bowl; I'm just indifferent and mildly bewildered by all the excitement. When the great event rolls around each year I find myself identifying with Maj. David Kabakov, the Israeli antiterrorist expert played by Robert Shaw (using one of his more preposterous foreign accents) in the 1977 movie Black Sunday. Informed that terrorists plan to attack the Super Bowl, Maj. Kabakov sweeps his narrowed eyes across thousands of empty stadium seats, pauses dramatically, then inquires: "What eeez zees seeng you Am-e-di-cans call ze Syooper Bowl?"

Advertisement

This stance, I think, enables me to consider the economics of Super Bowl advertising with a cool-headed focus on the numbers. They just don't add up. (For Seth Stevenson's sizing up of the ads themselves, click here.)

Superficially, a Super Bowl buy would seem a straightforwardly smart thing for an advertiser to do, because the Super Bowl usually reaches a bigger audience than anything else on TV. But advertisers don't have unlimited dollars to spend. Consequently, they tend to focus on the cost of an advertisement per thousand people it reaches, a statistic called the "CPM." The Super Bowl's CPM has (factoring out inflation) tripled since the first Super Bowl aired in 1970. According to Broadcasting & Cable magazine, that's one-and-a-half times the increase in CPM for prime-time network programming in general. Is the higher price justified?

Late last month, Broadcasting & Cable reported on an interesting experiment. It asked an ad agency called Starcom to enter Nielsen ratings data from last year's Super Bowl time slot into a computer to see whether the computer could "beat" a Super Bowl ad buy. The average price of a Super Bowl ad last year was $2.30 million per 30-second spot. (The price this year climbed to $2.40 million per 30-second spot.) Starcom fed that into the computer, too. Then it set about trying to see whether, by "spending" the same amount on counter-programming that other networks and cable channels ran against the Super Bowl, the computer could exceed the Super Bowl's slice of the audience that advertisers care about: adults between the ages of 18 and 49.

It wasn't even close. The computer's Super Bowl ad buy reached 29 percent of adults 18-49; the computer's counter-programming ad buy reached 47.3 percent of adults 18-49. In essence, buying ad time on various TV shows that were supposedly going unwatched—because "everybody" was watching the Super Bowl—would have enabled advertisers to reach 60 percent more potential customers.

Advertisement

Strangely, people in the advertising industry are unmoved by this statistic. Even Starcom emphasized to Broadcasting & Cable that its computer benefited from knowing after the fact the ratings garnered by the Super Bowl and the various programs that ran against it. A real ad buyer would have had to guess which counter-programming on which to buy hundreds of ads. So, OK, maybe a flesh-and-blood ad buyer couldn't beat the Super Bowl ad buy by the 60 percent achieved by an omniscient computer. Maybe it could "only" beat it by 20 percent. That hardly strikes me as an argument in favor of buying Super Bowl time.

Within the advertising industry, there appears to be an unshakable belief that Super Bowl ad buys are justified because the ads have a much greater impact than TV commercials usually do. Viewers know that advertisers use the Super Bowl to show off their creativity, and so they've come to regard the Super Bowl as, among other things, a kind of mini-film festival. Some polls actually show that more people watch the Super Bowl for the ads than for the game itself.

But there's no particular reason to believe that highly creative TV ads provoke, even in an audience that craves them, any greater aggregate desire to purchase the products being sold than uncreative TV ads shown to a greater number of people. By all accounts, the audience that loves to watch Super Bowl ads is looking for entertainment, not ideas about how to spend its consumer dollars. If I'm Frito-Lay and I want to sell more Fritos, I should want my funny ad featuring the rapper M. C. Hammer to be shown to a big audience, or to an audience that I know is unusually likely to crave junk food. I shouldn't especially care about whether that audience is unusually receptive to the ad's wit—unless it can be proven that this receptivity translates into a craving for junk food.

This reasoning strikes me as obvious. So, why do advertising agencies tout the wonderfulness of advertising on the Super Bowl? I suspect the answer is that, while the Super Bowl may not be an especially smart forum in which to sell the advertisers' products, it's a great forum for selling the ad agency itself. Ads that attract attention to themselves may not sell consumer goods, but they do provide a wonderful forum for ad agencies to show the world how creative they can be. And it's a lot easier for an ad agency to purchase one very expensive ad slot than it is to match that fat commission through the purchase of hundreds of ads. Add these considerations together and it's hard to avoid the conclusion that ad agencies are driven, perhaps unconsciously, to make suckers of their clients. The clients are receptive because having an ad on the Super Bowl confers an undeniable glamour. But glamour doesn't pay the bills.