Media Money with Julia Boorstin

What's a Super Bowl Ad Worth?

The Super Bowl isn't just the biggest game of the year; it's the biggest annual forum for advertisers.

More than 100 million people are expected to tune in to the big game, a rare un-Tivo-able TV event. Commercials are a highly anticipated part of the game, which makes them the ultimate place for companies to reach a huge swath of the American public, to launch new products or reinforce a brand message. All that reach and power is worth $3 million for a thirty second spot. It can cost another million dollars to produce a Super Bowl-worthy ad, plus more to promote that investment in the bowl game.

How do this year's prices compare?

An average cost of $3 million is pretty much in line with last year, according to CBS and Kantar/TNS Media Intelligence. This is up from $2.7 million for a 30 second spot in 2008. Considering that last year at this time we were in the depths of the financial crisis it's notable that we're only seeing stabilization, and no increase. Advertising industry sources tell me that the cheapest ad sold this year was about $2.5 million, at least one hundred thousand dollars less than the cheapest price paid for an ad last year.

CBS (or whichever network hosts the game) sells Super Bowl ad inventory over a six-month period at a range of prices. The cost of a 30-second ad in the game fluctuates depending on when the ad is purchased, where it's placed over the course of the game, and how much ad time a single advertiser is buying. Budweiser purchased 5 minutes this year, and is surely getting a healthy discount.

The number of new advertisers in the Super Bowl this year is a stunning 10 — a sign of the ongoing popularity of the Super Bowl.

It's also a sliver of optimism for the advertising market. Last year there were just five newcomers to the game. Back in 2005 there were 9 new advertisers in the game, but we haven't seen a number like 10 since the rah-rah days of the Internet boom, when dot-coms were lining up for a spot in the big game.

Another factor that's rarely discussed — the network that hosts the game can manipulate pricing by reserving more or less ad inventory for promotion. The biggest advertiser in the Super Bowl every year isn't actually Budweiser; it's the network that airs the game. (CBS, Fox, and NBC are scheduled to rotate Super Bowl broadcasts through 2014.) The networks generally reserve fifteen to twenty percent of the game's ad time, a great way to promote upcoming shows and build a new audience for new programs that are about to debut.

Last year NBC dedicated 7 minutes, 15.7 percent of the game's of ad time to its own promotions. Back in 2007 CBS dedicated 22.2% of the game's ad time, over nine and a half minutes, to its own promotions. Reserving an additional two and a half minutes of inventory can make supply more scarce and bump up the price of a spot. We'll see how much inventory CBS keeps for itself, which will indicate how much revenue they bring in from the big event.

Questions?  Comments?