Today’s media, economic, and social landscape is unprecedented. While the economy saw growth at the end of 2023, concerns remain in a contentious election year about slowing growth and rising ad costs. Media spend is at an all-time high, with global advertising on track to top $1 trillion in 2024. And the Super Bowl, one of the biggest sporting and advertising events in the world, is just a few days away.
Between two powerhouse teams vying for the Super Bowl championship, an electrifying halftime show, Taylor Swift’s anticipated presence (a guaranteed viewer booster), and the numerous Super Bowl commercials, expectations are high that this year’s big game will surpass last year’s 110 million viewers.
The prevailing theory is that a Super Bowl advertising campaign can have immediate demand impact in the weeks following the Super Bowl. But how effective is a Super Bowl campaign at driving business performance, particularly when the cost of a 30-second commercial spot averages $7 million dollars? With media fragmentation, intense competition for customer eyeballs, and the need to balance brand impact versus performance value, how do you determine whether a Super Bowl ad is right for your brand?
Offsetting the high cost of a Super Bowl ad
The Super Bowl is among the most-watched live sporting events in the world, making it an enticing target for brand investment. And in an evolving video media landscape, it remains a huge TV spend. According to Fox Corporation, gross advertising revenue from the 2023 Super Bowl broadcast generated $600 Million.
Each year, the average cost of a Super Bowl commercial has steadily increased. In 1970, a Super Bowl commercial cost $72,500 (the equivalent of $573,000 today when adjusted for inflation) versus today at $7 million dollars, plus millions in production costs and pre- and post-game brand initiatives.
Many of the largest and most well-known Super Bowl advertisers would need to double demand to offset the cost of the spot.
Advertising budgets are often fixed and spend on the Super Bowl commercial is typically redirected from other higher performing media. A popular beer brand with a $7 million dollar Super Bowl commercial would need to double demand in the weeks following the Super Bowl to justify reallocating that spend against better-performing media – a target that is not very realistic. And that means doubling demand for the total brand, not just the advertised product if the ad promotes a newer or smaller business unit.
Super bowl ads, on average, deliver a short-term ROI that is at least 20-50 percent lower than a comparable alternative investment, based on intelligence from Analytic Partners ROI Genome. For a more established, high awareness consumer brand, the opportunity cost is even larger, and the Super Bowl ROI is, on average, 75 percent lower than other marketing activities.
Knowing the immediate return is low, should brands continue to invest in Super Bowl advertising?
It depends on your strategies and goals. Super Bowl ads drive an uptick in brand demand. Behind a significant ad spend and massive audience, this is relatively intuitive. The challenge is, given the high cost of the :30 second spots, the additional demand is almost always not enough to offset the high cost. When executing a Super Bowl campaign, brands must plan to offset the high cost, and lower ROI, with an exceptional surrounding media and communication strategy.
Activating and amplifying the short-term impact from the Super Bowl ad is critical to get the most impact from the campaign and justify the investment. An effectively executed Super Bowl ad, supported by a range of pre- and post-game activities, can drive a 4-5x larger impact, above and beyond the short-term.
ROI Genome’s 4 proven strategies to maximize your Super Bowl investment
Despite the high cost of a Super Bowl advertising campaign, brands will continue to invest. Advertising inventory was nearly sold out in November, well ahead of the big game.
To make the most of the sponsorship investment, Analytic Partners recommends 4 proven strategies:
- Activate, Activate, Activate: Strong PR, social media, and POS strategies around Super Bowl ads are key to keeping the message top of mind with viewers long after the game is over. Amplify with a disruptive owned-channel strategy, featuring the ad and its messaging across all platforms, and leverage organizational leadership to drive additional word of mouth.
- Develop Creative that Halos: 50% of ad performance on average is driven by halo effects across brands and business units. Some of the top performing creatives will be those which effectively drive impact beyond what is directly advertised. In 2023, Molson Coors’ first Super Bowl ad in more than 30 years ranked as the top beer commercial by Ad Age and AdWeek, and was among the most talked-about ads on social media (top-15 trending topic on Twitter).
- Take Advantage of Synergies: Amplify with multiple paid, owned, and earned marketing vehicles to leverage scale. For example, according to ROI Genome, a four channel marketing campaign drives, on average, 55% more demand than a single tactic execution. Airing the Super Bowl ad through higher ROI channels, like Social and Online Video partners, will boost overall campaign performance, as cost premiums will be less of a driver.
- Monitor Non-Working Costs. Utilizing the ad beyond the Super Bowl will stretch non-working/production costs and minimize the production-to-working cost ratio to maximize the overall financial return.
Despite the rising cost of Super Bowl commercials and the uncertainty of the economic landscape, well-known brands are doubling down on brand and performance marketing programs to invest in Super Bowl commercials.
Marketing is as complex as ever with the proliferation of new technologies and channels. The tried-and-true live sports advertising model involves multiple online and offline programs that all work together synergistically. Executing an effective campaign involves alignment of KPIs reflective of the business impact and not just impressions.
By taking a commercial view of your Super Bowl campaign and with a strong partnership between Marketing and Finance, you can align on the right metrics to understand the full impact to the business. For more information on how commercial analytics can maximize the impact of your sponsorship and advertising programs, get in touch with Analytic Partners today.