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Why There’s No Such Thing As a Free Ad
January 31, 2024
Where We Need No Cash
February 2, 2024
Mayo Cat is my favorite 2024 Super Bowl ad:
Just 30 seconds, its slot probably cost $7 million.
Super Bowl Ads
History
Averaging close to $7 million for 30 seconds, all Super Bowl ad slots are (reputedly) gone.
At $3.5 million in 2012, Super Bowl ad prices have doubled during the past decade. Below, you can see their upward climb from 1967 to last year’s game:
Incentives
Those $7 million 30-second ads came down to a whopping $233,333.33 per second. And yet, knowing the slots were limited, companies purchased almost all of them by November 2023.
As you might expect, viewership is the reason. While last year’s numbers were close to 114 million, this year, Taylor Swift’s presence could push them higher. According to Yahoo Finance, the NFL recorded a nine percent pop in women watching the games.
It all adds up to a substantial return on an investment of $7 million for the time and then extra millions to make the ad. Some consumers (like me) are more interested in the ads than the game. For businesses, the Super Bowl is a unique opportunity to build brand awareness, increase sales, and even buoy their stock price. One University of Minnesota study concluded that three days after the game, our word-of-mouth ad engagement was up 68 percent. After a month, at 16 percent, the increase remained.
Our Bottom Line: Monopoly Pricing
Saying its Super Bowl TV ad inventory for the game is sold out (except perhaps for ad time it is holding back for a last-minute sale), CBS can become a “price maker” and implement monopoly pricing. However, as with all monopolies’ demand curves, there is some elasticity. We could hypothesize that Anheuser-Busch’s 2024 total of 2.5 minutes for its brands displays the inelasticity that reflects a lack of price sensitivity. By contrast, others, responding to the huge per second price tag, will show us as brief a spot as possible.
My sources and more: As always, the Hustle had the distinctive Super Bowl ads graphic and Yahoo Finance, the Taylor Swift facts. But, for the ads, Variety and Fan Arch and Kantar had the dollar details. And finally, we peeked at the lengthy abstract for the University of Minnesota engagement study. (The paper was too expensive.)
Our featured image is from the 1/28/24 Kansas City Chiefs Ravens game.
