The Super Bowl: Television Advertising Gone Wild

Next Sunday, the newest edition of America's "must-see TV" will be unveiled. On February 3rd, millions of Americans and millions more around the globe will be ensconced in bars and their cozy living rooms with name-brand snacks and beer as they gather to witness the latest installment of television advertising "gone wild." Of course, many will watch the hyped-up wrapper around the ads, known as Super Bowl XLII. Here we will find out whether Tom Brady and the New England Patriots will be able to cap their perfect season by winning the biggest of games, or if the "we prefer to win on the road underdog NY Giants will win the day. Millions of more casual fans are also eagerly awaiting the newest creative pitches offered during commercial breaks in the action.

While the Super Bowl has drawn large viewership since the early days of Vince Lombardi's Green Bay Packers in the 60s, the increased attention focused on consumers, especially over the last twenty years has been striking. According to Nielsen Media Research [VNU.F], from 1988 to 2007, viewership only increased from 80.1 million to 93.2 million. On the other hand, advertising rates for a 30-second spots increased from $645,000 to $2.385 million over the same period, according to a news release by TNS Media Research Intelligence on 1/17/08. This equates to compound annual growth for advertising rates of 6.76% while the compound annual growth in inflation over the same period, according to CPI data from the Bureau of Labor Research, was only 2.85%. Similarly, total ad revenue rose at a 7.63% annual clip from $34.8 million to $151.5 million. That is more than all of Vegas expects to have bet this year according to Bloomberg. This year, writes TNS Media, Fox is proudly accepting an estimated average of $2.7 million for each 30-second ad during the game.

Lending some credence to marketers' advertising decisions is data from The Nielsen Company's 2008 Guide to the Super Bowl, which notes that "people in wealthy homes, which generally have more than a $100,000 income, are almost three times more likely to watch the Super Bowl as people in homes with less than $30,000 in annual income." These ads reach a large audience only available from broadcast TV. This is an unusual opportunity for marketers in what is becoming a hyper-niche audience world. Additionally, this is true original programming in a writer's strike media world.

Emblematic of the cultural phenomenon which the event has become, viewer excitement extends long after the game clock stops; and it travels far beyond the next day water cooler conversation. As stated in the New York Times last week, Anheuser Busch (BUD) estimates its Super Bowl XLI commercials were viewed online more than 30 million times - with 87% of the volume occurring in the seven days after Super Bowl Sunday. This includes not only the company's budbowl.com site, but also on YouTube (GOOG), MySpace, Yahoo (YHOO), as well as smaller niche sites like Veryfunnyads and FunnyorDie.

The variety of marketers running ads is also interesting. Contrary to popular belief, the most promotional advertising stems from the network itself. Typically, the network broadcasting the Super Bowl fills in 15-20% of all ad-time during the game, as per the release from TNS Media Intelligence. This figure may be even greater this year due to the writers' strike, and the heightened need to plug programming to viewers who may not have tuned in to the network for some time.

Super Bowl XLII offers News Corp's (NWS) Fox a chance to eliminate some of the lingering staleness resulting from the writers strike by re-introducing viewers to the network in a festive atmosphere. Moreover, Fox and other companies may see this as an especially propitious occasion to advertise as New England attempts to become the first ever 19-0 team in matching up against the media capital of the nation, Madison Avenue's own New York's Giants. This is significant, as 2007 marked the first year in which Super Bowl network TV ad spending was surpassed by ad revenue generated by "March Madness" in the final weekend of the NCAA Men's Basketball Championship, as indicated by TNS Media (albeit that includes three games versus one).

As for other marketers, beer and soda companies will offer the most ads, with Anheuser Busch and Coca-Cola Co. (KO) expected to run at least seven and three commercials, respectively, while Pepsico, Inc. (PEP) has purchased two minutes of total commercial time, according to a December 14th article from Advertising Age entitled, "Who's Buying What in Super Bowl XLII." Indeed, the leading five pitchmen over the prior two decades have been Anheuser Busch and Pepsico, which have marketed their products in every game during this period and also General Motors Corporation (GM), Time Warner Inc. (TWX) and Walt Disney Co. (DIS), all of which will continue their campaigns this year. TNS Media's posting indicates that together, the five have contributed 36% of the total marketing costs from 1988 - 2007.

However, there will also be other companies trying to make the most of the opportunity to reach as many Americans as possible, which means being imaginative in creating a spot that's catchy and memorable. For example, GoDaddy.com, known for making racy ads in years past, has in the words of its CEO produced "the funniest best ad we've ever done" (source Ad Age). Other brands planning to showcase themselves during Super Bowl XLII are Audi, Bridgestone, CareerBuilder, Cars.com, Dell (DELL), e*Trade (ETFC), FedEx (FDX), Frito-Lay, Gatorade, Garmin (GRMN), Hershey (HSY), Hyundai, Kraft Foods' Planters (KFT), New Line, Paramount Pictures (VIA.B), P&G's Tide-to-go (PG), Salesgenie.com, Sony Pictures (SNY), Toyota (TM), Unilever's Sunsilk (UN), Universal Pictures, Under Armour (UA), Victoria's Secret (LTD), the White House Office of National Drug Control Policy and of course, the NFL itself.

The winner is of course Fox which gains the eyeballs, presents its own ads, and rakes in the cash, all at the same time. The winners of the best and most memorable ads will be debated the following week. We are hoping not to see an index from the game.