THE BLOG
01/20/2016 09:11 pm ET Updated Jan 20, 2017

Super Bowl Ads Provide a Great Way for Advertisers to Waste $6 Million

CBS is selling a 30-second spot during the 2016 Super Bowl for $5 million -- 11% higher than NBC charged for half a minute during the 2015 Super Bowl. How is the network able to charge so much?

  1. Reach a large audience. Audiences tend to vary between 110 and 117 million people depending on the teams playing and a variety of other factors. Last year, the audience averaged 14.4 million.
  2. Are entertaining. Many love to watch Super Bowl ads. Some watch the game just to see the ads.
  3. Leverage an even larger audience. News stations and talk shows feature them on their programs, and there is a lot of buzz that generates even larger audiences on social media and around water coolers at work.
  4. Create a lot of jobs. There are a large number of people involved in making, airing, re-running and analyzing them.
  5. Put the marketing profession on center stage. These ads give marketers the opportunity to bask in the spotlight.

With all the above positives, why might I have an unfavorable impression of most Super Bowl ads? It's quite simple. Most of them don't sell. They cost a lot and produce questionable returns to those that pay for them.

Estimated costs

The cost of producing a Super Bowl ad can vary greatly. If celebrities and top directors are used, they can be very expensive. The Chrysler ad with Eminem in 2011 cost $9 million to produce. At the atypical low end, the Doritos Time Machine commercial, which aired two years ago, reportedly cost $200 to make because an amateur that won a contest created it. The average cost to make one is roughly $1 million.

Whatever it costs to produce, a Super Bowl TV spot in 2016 will cost advertisers an additional $5 million to air on CBS for 30 seconds. Doing the math, companies will be shelling out at least $6 million for the commercial and air time combined.

The real issue is return on investment

While these costs are significant, good business people do not focus on costs. They are more interested in the return that their investment is likely to produce. When you look at the data, Super Bowl ads are typically not very good investments.

Effectiveness

I personally like to watch many of the same commercials that viewers vote as their favorites. They can be funny, sexy, clever and entertaining. The problem is that they do not typically generate a significant blip in sales. Why? Even if viewers can recall the product or brand being advertised, very few spots provide sufficient unique benefits to give buyers good reasons to buy. According to a post by Jack Neff in Ad Age, a study shows that 80 percent of Super Bowl ads don't improve sales.

What if you invested the cost to air one Super Bowl ad in other media?

According to Jack Marshall in Digiday, if you invested $4.5 million (which would buy you 30 seconds on the 2015 Super Bowl), here's what you could get in other media:

  • 3.5 billion display ads.
  • 50 million video views on Facebook.
  • 6.4 million clicks on search ads.

Since the 2016 Super Bowl will cost roughly $6 million for 30 seconds (if you add the costs to produce to the costs to air the commercial), you can multiply the above numbers by 1.33.

If the Super Bowl ads produced the sales or bona fide brand impressions you want, the above data would be irrelevant. The fact that 80 percent of them don't means that marketers could find better places to invest their advertising dollars.

Great opportunity wasted

It is true that the Super Bowl affords advertisers the opportunity to reach a huge audience at a time when audiences are fragmented over too many different media. The tragedy is that too many viewers do not remember very much about the brands or products advertised. While many say they like the commercials in the moment, they do not remember the products for very long afterwards, and they certainly do not buy them as a result.

If it doesn't sell, it is not creative

Rather than exploit this opportunity, too many "blow it" by focusing on the entertainment value of the commercials and neglecting what should be the main focus -- selling the product, the stock and everything else the company has to sell. They tend to forget that the most important part of the AIDA model (Attention, Interest, Decision, Action) is the second A -- not the first. If a commercial is good at getting attention and entertaining the audience, why not take the further step of planting the right message in the brains of viewers to get them to take buying actions?

In his book Ogilvy on Advertising, David Ogilvy quotes another agency that claimed, "if it doesn't sell, it isn't creative." Too bad David Ogilvy, Rosser Reeves, Bill Bernbach and Shirley Polykoff are still not with us. If they were, Super Bowl commercials would not only be entertaining, they would also greatly increase sales.