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.