The cost of advertising during Super Bowl XLIV--is it a good deal?

Anyone who hears what Super Bowl advertising rates are--they suck air!

Yes, most people think that it is an extravagant use of money for a firm to pay what's required to run a 30-second commercial during the Super Bowl game each year.  Admittedly the money demanded by CBS is a very large sum of money--so it makes sense to ask the question:  What is the premium--if any--one has to pay to advertise to an audience that's watching a football game?  

First of all, high rates to advertise during the Super Bowl game may reflect the reality that the audience is substantially different or greater than the usual prime time audience on television.  Costs to advertising during prime evening hours in the U.S. command a high premium--that's when television viewing peaks for any given day.  To run a 30-second spot on CBS's CSI, as an example, would cost you about $200,000, or the equivalent of about a penny and a half for every man, woman, and child who's viewing. 

The rate is enormously greater, but still could be a good deal!  

The costs to run a 30-second commercial during the Super Bowl are substantially more, at $2.5M--about 12 times more!  At the same time, the audience is substantially larger as well, at 90 million people viewing the Super Bowl, compared to CSI's measley 14.2M viewers on a regular weekday.  So, in fairness, the increased costs have to be seen in the context of a much greater audience than an ordinary prime-time show.

So, are the ad rates under these circumstance for a Super Bowl commercial reasonable or not?  In the Table shown below, one can see that by comparing the rates for six of the top 20 television serials in the last week of January 2010, the cost of a Super Bowl commercial spot [compared to "average" prime-time spots] sells for a premium, extra charge; this premium ranges from a low of 37% to a high of 118%.  Stated differently, Super Bowl XLIV advertising adjusted for audience size goes for a rate that is about 75% higher than one would normally expect to pay for a commercial running in a strong prime-time program.  

Programs in January 2010		Number  of U.S. Viewers	% of U.S. TV Viewers [290M]	Cost in dollars, 30-second spot	CPM	Super Bowl % "Pre-mium"
Two & a Half Men	CBS	16,310,000	5.62	$226,635	$13.90	100
Big Bang Theory	CBS	15,046,000	5.19	$191,900	$12.75	118
CSI	CBS	14,287,000	4.93	$198,647	$13.90	100
Grey's Anatomy	ABC	12,699,000	4.38	$240,462	$18.94	47
60 Minutes	CBS	11,320,000	3.90	$198,647	$17.55	58
Desperate Housewives	ABC	11,320,000	3.90	$228,851	$20.22	37
Super Bowl XLIV	CBS	90,000,000		$2.5M	$27.78

 
 

So the answer to the question of whether advertising rates are a good deal during the Super Bowl, is in somewhat better focus, because now we know what the added "cost" is over normal rates--and that's almost twice what it is under more typical circumstances.  Stated differently, a commercial that runs on an ordinary week night in a strong prime-time program context costs about 3 cents a minute per viewer "eyeballs"--that same cost for a Super Bowl ad has a price tag of about 6 cents!    

Who are you and what are you advertising--that's what it comes down to!  

A more definitive answer to question "Are Super Bowl ad rates a good deal or not?" come down to a consideration that depends not solely on what the precise, adjusted cost rate is, but on who's doing the advertising and what are they selling!  That's the subject of tomorrow blog post.  Stay tuned!  

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