Are Super Bowl Ads Really Worth $30 Million?

The most expensive 30-second commercial slot in this weekend's Super Bowl sold for $5.6 million, but the total cost to make these ads is more like $30 million. Learn what kind of return on investment companies hope to make in this episode of BrainStuff.

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Episode Transcript

Speaker 1 (00:01):
Welcome to brain Stuff production of I Heart Radio. Hey,
brain Stuff, loring bog O bomb here. The Super Bowl
is literally the super Bowl of advertising. Super Bowl broadcast
drew a record breaking TV audience of a hundred and
fourteen point four million viewers. It's since dropped a bit
to point two million viewers as of twenty nineteen, but

(00:25):
still there is no other United States televised event that
even comes close to the drawing power of the Big Game,
making it the ultimate platform for advertisers to pitch their
pickup trucks, beer, and misogynist web hosting services. Exactly how
much is it worth to them? Up to five point
six million dollars. That's the highest going rate for a

(00:46):
single thirty second commercial during twenties Super Bowl fifty four
broadcast on Fox. But five million is only the tip
of the iceberg. Most Super Bowl advertisers drain their budgets
on c g I, talking animals and big name celebrity endorsements,
making a real cost of producing a Super Bowl ad
closer to thirty million dollars. But how is it possible
that spending thirty million dollars in thirty seconds is a

(01:09):
brilliant marketing plan? For that price, you could buy sixty
commercials at five hundred thousand dollars a pop during the
highest rated shows on television. Does the Super Bowl offer
a super return on investment that can't be matched by
mere mortal TV broadcasts? There's some serious math involved in
answering that question. Marketing Professor's Wesley Hartman of the Stanford

(01:29):
Graduate School of Business and Daniel Clapper of Berlin's Humboldt
University conducted an in depth economic analysis of the return
on investment of Super Bowl ads, and their results seemed
to confirm what Madison Avenue has been selling for years.
Super Bowl ads deliver a significant boost in revenue between
ten to fifteen percent per household in the eight weeks
following the broadcast. That's an r o I of a

(01:51):
hundred and fifty to a hundred and seventy. Hartman and
Clapper focused their research on beer and soda brands that
advertised during multiple re Bowls. The researchers compared TV ratings
information from more than fifty U S markets with detailed
beer and soda sales data from stores in those same
geographical areas. When Budweiser and Pepsi ran ads, during the

(02:12):
Super Bowl. It was like dropping a fat stone in
a pond, with the ripple effect boosting sales for weeks
to come. Some Super Bowl advertisers don't even have to
wait for the ripple effect. Remember go daddy dot Com,
the aforementioned controversial web hosting company. The Monday after running
its twelve Super Bowl ad in which a supermodel kisses
a nerd, Go daddy dot Com recorded its best sales

(02:34):
day ever. So case closed, five million or even thirty
million dollars on thirty seconds is money well spent, ah,
if it were only that simple. Like all good stories,
this one has a twist. It turns out that the
Super Bowl boost only goes into effect if a single
beer or soda brand advertises during the game. If a

(02:54):
competitor also places an ad, those gains become losses. The
researchers call it a class prisoner's dilemma. Here's how it works. If,
for example, both Coke and Pepsi do not advertise during
the Super Bowl, they will both still earn over a
billion dollars in profit over the eight weeks following the game.
If either Coke or Pepsi advertises but not both, the

(03:17):
brand that advertises gets a twenty seven million bump in profit.
But if both Coke and Pepsi advertised during the same game,
each brand earns eighty million dollars less than if they
hadn't advertised at all. So to advertise or not to advertise,
According to Hartman and Clapper's calculations, for industries with just
two or three major players, you might get a better

(03:39):
payoff by setting out the Super Bowl. But again, their
research focused exclusively on beer and soda, not trucks, insurance, shoes, restaurants,
and all the other stuff pedaled during the Super Bowl.
And let's not forget that advertising is not just about
immediate boosts and revenue. It's also about brand recognition. There's
no bigger stage to debut your brand. Then the Super

(04:00):
Bowl survey, secent of Americans said that they looked forward
to the Super Bowl more for the commercials than for
the actual football game. The ads not only played during
the game, but are reposted online and shared via social media.
A great Super Bowl ad really can make your brand,
and a bad one can break it. Let's take a
moment to appreciate arguably the worst Super Bowl commercial ever

(04:24):
in the Startups Shoe retailer Just for Feet hired ad
agencies ATTACHEE and SATTACHEE to produce an unforgettable spot for
the Big Game, and that's exactly what they did. The commercial,
which depicts four white guys in a humby hunting down
and drugging an African barefoot runner and then fitting his
unconscious body with shoes which he hates, is certainly unforgettable.

(04:46):
Just for Feet ended up suing's attache and Attache for
ten million dollars and then filing for bankruptcy a few
months later. While the discovery of accounting fraud was the
main reason, you can bet that Super Bowl ad didn't
help the bottom line, and that's whe a return on investment.
Today's episode was written by Dave Ruse and produced by

(05:08):
Tyler Clang. Brain Stuff is a production of iHeart Radios
How Stuff Works. For more on this and lots of
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