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
The Office: $213,164
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.