Super Bowl 2010: Watch for Falling Prices

It is August, which means it is time to begin thinking about the 2010 Super Bowl.  For marketers, this is the time to decide whether to buy advertising time or not, since developing television spots can easily take several months.

A big question: what will be the price for spots on the 2010 Super Bowl?

The price for Super Bowl advertising time has been steadily increasing.  Over the past four years the price of a 30 second spot has marched steadily up:  $2.5 million, $2.6 million, $2.7 million and, in 2009, $3 million.  Of course, these are all the published list prices; advertisers often negotiate better deals.

The pricing trend is unlikely to continue in 2010.  Indeed, I expect to see a sharp drop in the price of a spot.

There are two factors behind this.  The first factor is simple supply and demand.  The supply of Super Bowl spots will be flat; the length of a football game is not likely to change.  But demand will almost certainly be down; companies are slashing marketing budgets in a bid to protect profits in a slumping economy.  New companies, in particular, are not likely to be buying many Super Bowl spots this year.  When cash is tight, spending heavily to quickly ramp up awareness is incredibly risky for a startup.

With flat supply and weak demand, pricing should logically fall.

The second factor is perception.  Advertising on the Super Bowl makes a major statement, since everyone knows Super Bowl ads are expensive.  In a weak economy, many companies will be nervous about the signal a Super Bowl ad will send.  The U.S. auto industry, the financial services industry and the healthcare industry are all likely to be very sensitive to sending the wrong signal in a difficult economic time.

One way to shift the high-price perception on Super Bowl advertising is to dramatically cut prices.  This could make advertisers appear smart.  Perhaps the executives at GM could claim, “We are taking advantage of the new low rates to reintroduce our brands to the American public.”  Other advertisers could note, “We are spending 25% less for the same audience we reached in 2009.”

Any way you look at it, prices will almost certainly be down.

My advice to CBS: cut official prices by at least 30%, to $2.1 million per 30 seconds.

Tim Calkins

2009 Super Bowl Advertising Highlights

While this year’s Super Bowl advertising delivered the usual mix of humor and celebrities, it was a rather unique year. The spots were mixed, as always; some advertisers did a terrific job while others missed the mark. But the recession clearly played a role.
Perhaps the single most astonishing thing was the presence of Cash4Gold. This is a company that melts down jewelry. You send in your precious items and get cash in return. The fact that this company thought advertising on the Super Bowl was a good idea clearly reflects that fact that the U.S. economy is very, very weak. Liquidating the family gems is a desperation move. When you go to a pawn shop, you have hope of recovering your items. When you send them to be melted down, you are giving up hope. This is simply scary.
A number of the spots this year went directly at competition. Teleflora attacked flowers that arrive in a box, deliberately bashing the competition. Audi left Mercedes and Lexus in the dust. Hyundai went after BMW and Japanese auto companies. Denny’s made fun of family- oriented pancake houses, indirectly slamming IHOP. This level of competitive intensity reflects the tough economy, too; advertisers are trying to differentiate and drive sales at the expense of competition.

The Best
The job sites carried the day. Monster.com was the top finisher in the Kellogg Super Bbowl Advertising Review, with CareerBuilder very close behind. Both advertisers resonated because they featured people with lousy jobs. I suspect this is something many people can relate to. CareerBuilder takes the prize for most improved; last year CareerBuilder missed the mark with a horrific spot featuring a heart leaping out of a woman’s chest. This year’s effort was dramatically better.
Doritos breathed new life into the idea of consumer- generated content. Doritos ended up running two spots, both submitted in the Doritos “Crash the Super Bowl” contest. Both worked quite well because they attracted attention and had exceptionally strong branding.
The E*Trade baby was back this year, and with good reason; last year E*Trade was one of the top advertisers. This year E*Trade again hit the mark; the spot delivered a clear message and was highly entertaining.
Denny’s rounded out the top group of advertisers in the Kellogg Super Bbowl Advertising Review. The Denny’s spot communicated a benefit versus competition, and then revealed a striking offer: on Tuesday, the Grand Slam Breakfast will be free. This is a huge deal and will generate enormous excitement. I hope they have enough eggs for the likely demand.

The Worst
Five advertisers finished at the bottom of the 2009 Kellogg Super Bowl Review: Toyota, Vizio, Castrol, GoDaddy and SoBe.
The biggest disappointment was SoBe. This spot was part of the much hyped 3-D extravaganza at the end of the second quarter. People were encouraged to track down the special glasses, put them on at the appropriate moment and then get ready. And, after all the build-up, the SoBe spot was largely incomprehensible. SoBe’s spot in the 2008 Super Bowl wasn’t very strong. This spot was worse; it was an unintelligible muddle.
Toyota and Vizio were simply too dull to stand out on the Super Bowl. They weren’t terrible spots, really, they just weren’t very interesting. Castrol should have been better; the spot featured chimps, and chimps have a long and proud history on the Super Bowl. This one just fell a bit flat.
GoDaddy was, well, GoDaddy.

Other Interesting Advertisers
Anheuser-Busch stumbled this year, falling in the middle of the pack. A-B ran some very clever spots, such as the Bud Light spot with Conan, and a trio of nice, iconic spots for Budweiser. But A-B also ran a few dull spots, such as a skiing spot for Bud Light that was focused on drinkability (what is drinkability, anyway?) In addition, I suspect the trio of Clydesdale spots watered down the impact.
Pedigree ran a very cute commercial encouraging people to get a dog. The ad fell in the middle of the pack in the Kellogg Review, but I suspect it resonated with dog lovers, and that is the group Pedigree really cares about.
Pepsi and Coke both lacked fizz. The spots were all big and iconic but somehow fell flat. I suspect that in another year they might have worked, but in a grim economic time the light, fluffy stuff seems strangely out of touch.
The most inconsistent advertiser was Hyundai. The Korean company ran two commercials. One was quite effective at communicating that Hyundai recently won the North American Car of the Year, beating BMW, the Japanese autos and everyone else. The other was an old and fairly dull spot announcing the Hyundai assurance program, which lets you return the car if you lose your job. The mixed message was a problem.
I can’t figure out why GE was advertising at all. GE ran two spots, one highlighting how GE has wind technology, another highlighting GE’s smart electric technology. Why would GE do this? How will these spots drive sales? Remember that GE is a company about to lose its AAA credit rating; GE should have saved the money to shore up the finances.
But of course, GE is NBC’s parent. When sales of Girl Scout cookies are flat, you can always sell to your parents. The same rule applies for Super Bowl spots.

Tim Calkins

Super Bowl Advertising 2009: A Viewer’s Guide

The 2008 Super Bowl is just days away. After months of build-up, the teams will finally take to the field, and perhaps more importantly, the advertising will finally run. The big event is at hand.

What follows is a viewer’s guide to the 2009 Super Bowl advertising: a list of things to watch for as the game unfolds.

1. Overall: The big issue this year is the recession/depression/meltdown. Will the advertising creative reflect this? Or will we see the usual mix of jokes and gags and over-the-top production? Watch for how advertisers address the difficult economic climate. This is a big challenge this year; great advertising connects with people, and people are certainly concerned about the economy and the future right now.

2. The first spots: The most valuable advertising slot in the Super Bowl, and in some ways the most valuable advertising moment in the world, is the first ad that runs after the opening kick-off. Anheuser-Busch will run their best spot at this moment; this should be the spot that finishes at the top of the popularity charts. Does the spot measure up? Who gets the second spot?

3. Pepsi: The first half will be all about Pepsi. Watch for several spots from PepsiCo, including advertisements for Pepsi, Gatorade and Doritos. Last year PepsiCo ran some very strange advertising on the Super Bowl. Will they nail it this year?

4. The second quarter 3-D extravaganza: Be sure to locate your 3-D glasses for the second quarter 3-D ads. Do the ads really pop, in all senses of the word? Watch if anyone else at your party has the 3-D glasses. One of the big challenges for this idea was execution, simply getting the glasses distributed. How well did the advertisers do?

5. E-Trade: Last year E-Trade nailed it with two terrific spots featuring the talking baby. Is the baby back? Is he as funny and as on message? I suspect these will be some of the best spots to run this year. They certainly were last year.

6. Coke: In the second half Coke takes the field. Will Coke deliver? Last year Coke ran two great commercials. This year they have a new campaign, but with a similar message. Who wins the Pepsi vs. Coke battle?

7. The great job site battle: Monster and CareerBuilder go head to head in this year’s Super Bowl. CareerBuilder ran two rather polarizing and generally disliked spots last year. Will they deliver this year? How does Monster respond? Do they differentiate? Or do they promise the same thing?

8. Pedigree: I believe this is the first time a pet food brand has advertised on the Super Bowl. Does Pedigree fit in with the beer and the chips? The big question for Pedigree: will this spot actually drive significant incremental business? If so, how precisely will that work?

9. Denny’s: Denny’s is apparently rolling out an exciting new offer during the Super Bowl. What is it? Does it make sense? Look for this spot to generate a lot of talk value; Denny’s may be one of the strongest advertisers this year despite being new to the event.

10. Cars: There are three auto industry advertisers to watch, each with significant challenges. Can Hyundai credibly claim that a Hyundai is like a BMW? Will Audi follow-up last year’s arresting spot with another striking execution? And how will Cars.com position itself given that there aren’t many people buying cars at all right now?

All in all look for this to be another dynamic year for Super Bowl advertising, recession and all. I predict there will be some great spots that really stand out, and many spots that are very respectable. And there will be a few that really miss the mark; there always are.

- Tim Calkins

Evidence for Super Bowl Effectiveness

Perhaps the most frequent question I have about the Super Bowl is whether the ad buy is a judicious use of spending. My typical response to this is it’s worth it for the right brand with the right goals. I then will parlay into a discussion about how that $3 million dollars is not only about the 30-second spot that reaches millions of people: Brands are paying for pre-game intrigue and interest and post-game exposure and discussion. In addition, some brands will take their presence a step further for launching a massively new campaign. The point of this is to say that $3 million buys you quite a lot of exposure if you are successful and, especially for a brand with a strong strategy, could be a very wise investment. I’ve always said and believed this, and I don’t foresee changing this perspective in the near future.

 

However, along with touting the potential benefits of spending in the Super Bowl, I’ve also been very cautionary about the ability to gauge effectiveness. Indeed, Tim Calkins and I wrote an article about just how difficult, and perhaps impossible, a task it would be to accurately measure Super Bowl return on investment. And, while I stand by the fact that determining the precise ROI, or even a good approximation, is a herculean task, I was pleased to see a recent article by AdAge that discussed some metrics of success for being in the Super Bowl.

 

In this article, AdAge reports that more than 21 million consumers watched ads after the 2008 game online, Audi saw a 200 percent increase in web traffic within a month following the game, and E-trade had a 32 percent increase in the funded accounts opened after the game. These are only a few examples mentioned in the article. While this does not provide a complete, or even clean, metric of ROI, I think it does demonstrate the power of having a large audience interested in watching your ad. Put differently, while I don’t expect to see a metric of Super Bowl ROI in the near future, I think the accumulating evidence does indeed suggest that a Super Bowl ad buy can be a very effective use of one’s advertising budget. However, I’ll also stick by my comment that it has to be the right brand with the right strategy.

 

- Derek Rucker

Hyundai’s Challenge

The Super Bowl is full of challenges.  The Steelers have to establish a running game.  The Cardinals have to find a way to move the ball against Pittsburgh’s tough defense.   Kurt Warner has to connect with his trio of talented receivers. 

Perhaps the greatest challenge, however, awaits Hyundai.  The Korean automaker is attempting to convince people that Hyundai’s new Genesis sub-brand is a credible competitor to BMW, Mercedes and Lexus.  This is a daunting task.  Hyundai ran two commercials on the 2008 Super Bowl to support this effort, and Hyundai is back again in 2009.  The challenge remains.

Brands are incredibly powerful, in part because they shape our perceptions.  A nice piece of jewelry becomes very special when it carries the Tiffany brand.  The same item loses much of its value when it is branded Wal-Mart. 

Hyundai’s problem is that the Hyundai brand has a low-quality perception.  While the brand has improved in recent years, in part due to Hyundai’s long warranty, I suspect that few people think “luxury” and “top quality” when they think Hyundai.  People might think “value” and “reliability.”  But “luxury?”  No.

The good news is that the Genesis is apparently quite a good product.  Indeed, at the recent Detroit Auto Show the Hyundai Genesis was named the “North American Car of the Year.”  On a product basis, the Genesis might be a real competitor for Lexus and the other high-end brands.

Still, the only way the Hyundai Genesis will succeed is if the company is successful at changing the perceptions of the Hyundai brand.  As car site Edmunds.com noted, “With badges removed, the Genesis could easily pass as a Lexus or Mercedes-Benz, although we doubt many brand-conscious folks would give a Hyundai a second glance.”  With Hyundai’s current brand perceptions, it is very unlikely that the Genesis will be seen as credible luxury car, regardless of the actual product. 

And this is Hyundai’s Super Bowl challenge:  get people to view Hyundai as a viable player in the high-end auto market.

The Super Bowl is a wonderful venue for this sort of effort, because it gives Hyundai a chance to reach everyone and command attention.  The lack of automobile ads on the Super Bowl this year means that Hyundai will stand out even more than usual.  Hyundai is making a wise tactical choice.

Can Hyundai do it?  I doubt it.  For the brand repositioning to work it will take a very long time and many more Super Bowl spots in the years to come. 

If Hyundai wants to credibly play in the luxury space, it should follow the lead of Toyota, Honda and Nissan and create a new and distinct high-end brand.

Tim Calkins

Great Expectations

There is enormous pressure to perform well at the Super Bowl.  This is true for the players, of course, and it is true for the advertisers.

But the pressure is greatest for the marketing team at Anheuser-Busch:  they simply have to deliver.  Anheuser-Busch needs to have the most popular spot on the Super Bowl.  Anything short of this is a fiasco.

This is true for two reasons.  First, Anheuser-Busch is spending more than any other advertiser.  This year, A-B is apparently buying 4½ minutes of advertising time.  This is far more than any other advertiser.  With potentially nine different spots, A-B should manage to connect on one of them.

Second, A-B has consistently delivered in the past.  Just take a look at the top-rated spots in the USA Today Super Bowl ad poll for the past four years:

2005: Bud Light (the airplane spot)

2006: Bud Light (the magic fridge spot)

2007: Budweiser (the crabs spot)

2008: Budweiser (the rocky spot)

The problem, of course, is that when you consistently produce appealing spots there is huge pressure to keep the momentum going.

Will the Anheuser-Busch team do it again this year? 

I suspect so.  A-B will have nine tries.  More importantly, A-B knows Super Bowl advertising better than anyone; A-B has far more experience than any other advertiser in the world when it comes to the Super Bowl.

Still, there are some questions this year going into the game. 

Each year, Anheuser-Busch invites key members of the media in for a preview of the advertising to come.  This occurred last week, and led to articles in most of the major publications.  For example Suzanne Vranica (Wall Street Journal) and Stuart Elliott (New York Times) both wrote pieces on the A-B work. 

http://online.wsj.com/article/SB123206915478188421.html?mod=googlenews_wsj

http://www.nytimes.com/2009/01/20/business/media/20adco.html?_r=1

Lewis Lazare, from the Chicago Sun-Times was quick to pan the ads, with the headline “A-B Ads Fall Flat.” 

http://www.suntimes.com/business/lazare/1381291,CST-FIN-lew16.article

Lewis is a tough judge of advertising, but his concern raises a red flag.

One thing is certain:  the pressure is on down in St. Louis.

Tim Calkins

Is $3 million a lot?

The list price for a 30-second Super Bowl commercial this year is $3 million.  That is the price NBC executives settled on back in May 2008.

Three million seems like a lot of money, and in many ways it is.  With $3 million one could purchase a fleet of 100 Chevrolet Silverados, or more than 2.5 million double cheeseburgers at McDonald’s.  One could buy more than 16 homes at the 2008 median price for U.S. homes.  Next year, $3 million will probably be enough to buy 30 homes given how things look these days.

In the world of media and marketing, however, $3 million really isn’t that much. 

Companies spend billions and billions on advertising.  In its December 29, 2008 issue, Advertising Age listed the largest U.S. advertisers.  The top spender:  Procter & Gamble, maker of Tide and Pampers and dozens of other brands.  P&G’s 2007 advertising spending in the U.S. was $5.2 billion.  GM spent $3.0 billion, Ford spent $2.5 billion and Unilever spent $2.2 billion.  Now these are huge numbers.

When compared to total media spending, a Super Bowl commercial just isn’t that significant.  P&G’s 2008 Super Bowl spot for Tide would have made up 0.05 percent of P&G’s total media spending if we assume P&G paid the full list price of $2.7 million, essentially a rounding error. 

The Super Bowl isn’t that significant even for Anheuser-Busch.  If we assume A-B paid full price for their four minutes of advertising on the 2008 game (which they surely didn’t), the Super Bowl media cost made up 1.6% of the company’s total advertising budget.

The truth is that all advertising is expensive.  Advertising Age also provides pricing for network television shows.  Here are some of the latest figures for 30-second spots on a few of today’s top shows:

Grey’s Anatomy:      $326,685

Sunday Night Football:     $434,792

Survivor:     $212,800

The Office:     $213,164

ER:     $110,049

At $3 million, the Super Bowl is more than other shows, but not that much more considering viewership.  Grey’s Anatomy, for example, averages roughly about 15 million viewers.  The Super Bowl averages 100 million, or 6.7 times as many.  So on a per person basis, the Super Bowl is about 35% more expensive than Grey’s Anatomy.  By paying this premium, Super Bowl advertisers get everyone’s attention and huge PR buzz.  For many advertisers, this is a good spend.

So why does the price of Super Bowl advertising surprise us and attract so much attention?

The main reason is that most people have no idea what advertising costs.  They have no perspective.  So $3 million seems like a lot, and for most people it is.  But in a sense, spending more than $300,000 for a routine spot on Grey’s Anatomy should give us more pause than spending $3 million to be the center of attention.

Tim Calkins

Learning from Doritos

Creating a Super Bowl commercial seems rather easy:  you just come up with a clever joke and get a video camera to shoot the commercial.  How hard is that?

Doritos has decisively answered this question for us this year.  The Doritos marketing team is once again involving consumers in their Super Bowl marketing program.  Last year Doritos invited people to submit music videos.  Taking it one step further this year, the Doritos’ brand has invited consumers to submit their own commercials. 

The Doritos’ contest has two parts.  First, the Doritos’ team selects the top five spots created and submitted by entrants.  Second, consumers vote online for the best entries.  The ad with the most votes then runs during the Super Bowl.  In an interesting kicker, the Doritos’ team said that if the ad goes on to win the USA Today advertising poll, the creator would receive $1 million.

So if it were easy to create a great Super Bowl commercial, it should be apparent: the contest submissions should be entertaining, likeable, attention-grabbing and well-branded.  The spots should consistently deliver a message about the brand.

The reality:  The spots are generally terrible.  There are currently 1,961 submissions posted on the contest website.  Most of these are fundamentally flawed: the branding is weak, the product benefit isn’t clearly conveyed, or the spots simply aren’t attention-grabbing and likeable (or, in all too many cases, all three).

You can see all of the submissions, and vote for your favorite by visiting this site:

http://www.crashthesuperbowl.com/

I’m certain the people who submitted spots tried very hard, and spent a lot of time, money and energy.  The fact that so many are so bad simply highlights the fact that this is all easier said than done.

Creating a great Super Bowl spot is a huge creative challenge.  That is why it is such a joy to see spots that really work.  This is also why we should be gentle on the advertisers that don’t quite nail it.

This is all far harder than it looks.

 

Tim Calkins

Super Bowl Linkage: Not as Easy as You Think

One of the attractions of advertising in the Super Bowl is that most consumers want to watch, and are even excited to watch, the advertisements. Indeed, with the high production values and immense creative energy funneled into a Super Bowl advertisement, this fact should not be surprising. The surprise that might come to advertisers, however, is that getting consumers’ attention does not guarantee that they will remember the brand at all.

Let me share two of my favorite examples of this. First, Ameriquest (a mortgage company) participated in the Super Bowl for several years with their slogan, “Don’t judge too quickly.” The ads were funny and witty, and to this day when I show them in my advertising course they are sure to get a laugh. However, when I ask my students what the execution was for, a sizeable number of them don’t know. These are smart students who are watching the ad in the context of learning about it…surely the fault cannot all rest with them. Rather, the brand failed to make good linkage with the execution. Consumers remembered the execution but not the brand. Indeed, anecdotally, I recall websites giving Ameriquest awards like, “the brand whose ad I liked the most, but whose brand I forgot the fastest.” Certainly, this is not an enviable position.

A second notable execution is the Super Bowl ad featuring Michael Jordan and Larry Bird shooting baskets for a prized McDonald’s Big Mac. This is an all-time favorite commercial that has received praise from various sources. However, the praise of this execution is marred by a forgotten fact. About a third of consumers thought the commercial was for Nike. Indeed, with Michael Jordan as a spokesperson for Nike and the commercial revolving around the academic feat of shooting baskets (and these were insane shots) one could see how this could be misattributed to Nike. Of course, this was not only bad news for McDonald’s, but also for Converse. Larry Bird had been a longtime Converse endorser, and labeling this as a Nike commercial cast doubt on his allegiances.

The lesson for Super Bowl advertisers: even with consumer attention likely to be high, do not assume brand linkage. Keep your ads creative and funny, but leave little doubt in consumers’ minds who they are intended for.

- Derek Rucker

Herding Cats

One of the most entertaining Super Bowl commercials of all time was a spot by EDS that ran in 2000, featuring cowboys herding cats.  The ad was a wonderful take off on western films, complete with rough old cowboys and the herd fording a river.  Now, I suspect the spot would have performed rather poorly in the Kellogg Super Bowl Advertising Review for a very simple reason:  it wasn’t at all clear who the advertiser was or what was being promoted.  There was a clear linkage problem.  Still, it was a very funny piece of film. (Can we find out who the advertiser was?)

This year’s Super Bowl will apparently feature more “cat herding.”  This time, though, it is a slightly different scenario.  Intel, DreamWorks Animation, NBC and Pepsi are all working together to create a blockbuster event during the Super Bowl.  Getting all of these different companies coordinated and in agreement will be much like herding cats.

According to a joint press release, the companies will work together to create a 3D pod of commercials in the second quarter.  One commercial will be for Pepsi’s SoBe Lifewater, and another will be a trailer for DreamWorks Animation’s film, “Monsters vs. Aliens.”  Viewers are supposed to hang onto the 3D glasses in order to watch the NBC show “Chuck” on Monday evening in 3D.  According to the press release, Intel has produced 125 million pairs of 3D glasses, more than enough for 1 out of every 3 people in the United States.

This is a high potential event that will command a lot of attention. If it works, people will put on their 3D glasses and wait, eagerly, for the commercials. For a marketer, this is an astonishing and wonderful scenario: millions of people eagerly waiting to see your spot.

The challenge, however, is that executing this program will be incredibly difficult. There are two obvious problems. The first problem is getting all the players to work together. Getting agreement on a piece of creative is hard enough within one company, but getting sign off across four different companies is a truly remarkable challenge.

The second problem is that executing the program has inherent logistical challenges.  Distributing millions of glasses isn’t the easiest thing to do.  SoBe is apparently creating 25,000 retail displays.  This is good start, but only a start: if each display has 1,000 pairs (a lot), the total distributed will be 25 million.  That leaves 100 million more to go.

So this looks like a high risk, high reward event.  It is likely to break through, and that’s an important step in the Super Bowl.  For it to really work, however, there are a lot of cats to be herded and 3D glasses to be distributed in the next few weeks.

 

Tim Calkins