A 30 Second commercial during Super Bowl is worth 7 million USD. How so?
Background
The Finals of the National Football League (NFL) post-season, otherwise known as Super Bowl, is globally recognized as one of the most anticipated and exciting annual events on television. Whether you are a die hard fan of either the San Francisco 49ers or the Kansas City Chiefs who are going to be facing off this year at the 58th Super Bowl, or you are simply tuning in to watch your favorite pop star perform during the halftime show, one thing is certain - Super Bowl is guaranteed viewership.
The interest in the event is explicitly reflected in the fact that last year’s Super Bowl was the second most viewed event in the history of American television second only to the live broadcast of the first moon landing, with an average of 115.1 million viewers tuning in. If you ever wish to attend the Super Bowl live, you are very welcome to do so. That is if you have $8,176 to spare of course, as that is the exact price of the cheapest Super Bowl ticket at the Allegiant Stadium in Paradise, Nevada where the Super Bowl is being held this year.
The clear interest and demand to watch Super Bowl has been directly correlative with the increase in competition amongst America’s largest firms to get the coveted commercial coverage during the live broadcast of the Super Bowl. The fierce competition amongst firms to get as little as 30 seconds of commercial time has boosted the advertising fees as high as 7 million US Dollars. In this article, we are going to take a look at how the Super Bowl has become a battleground for large companies in the quest of advertising their products.
Viewership
Why is the cost of advertising so expensive during the Super Bowl? The answer, as you may have imagined is very clear - high viewership. The more thought-provoking question is - why is the viewership so high? Besides the fact that American Football is one of the major 4 sports in American sports, and the NFL is the biggest American Football league in the whole world, the marketing of Super Bowl is the main catalyst for these jaw-dropping viewership figures. Quite possibly the most significant marketing chip for the event is the halftime show, which funnily enough receives larger viewership than the actual game itself.
The NFL invites the most popular music stars every single year to ensure as much viewer engagement as possible, very well aware of the fact that this is the majority of the event’s viewership lies. The halftime show is exactly what gets people who are far removed from American Football to tune in, and experience live, the exciting and very-well choreographed performances of world-renowned musicians. Last year, hip-hop artist Rihanna set the viewership record for any Super Bowl halftime show in history with 127.017 million live viewers, which is 12 million viewers more than what had tuned in to watch the actual game. This year’s halftime show will be headlined by an R&B icon and 2000s megastar Usher, promising to gather a similar amount of viewers around television screens all over America, subsequently increasing traction amongst viewers for the Super Bowl.
Bidding Process
Large American corporations are very well aware of the fact that the Super Bowl is the highest viewed annual event in the United States, which is why so many of those corporations try to take advantage of that fact, as a means of exposing their product to as many people as possible. The competition can be seen as a bidding war of sorts. Commercial slots during the Super Bowl are limited (30-60 seconds to be exact). With such high demand from the large companies in the United States who wish to market their products on such a large platform, and such scarce time available, it really becomes a question of which companies are most willing to cave in, and outbid their competition for the 30-60 seconds of advertising. The broadcasting network, Fox, who was broadcasting last year’s Super Bowl, have subsequently taken advantage of the bidding war, by pushing the asking price for commercial slots to a record 7 million USD for 30 seconds of advertising. At last year’s Super Bowl, Fox sold out its ad inventory for a total of $600 million, an increase from 2022’s ad revenue of $578.4 million in total ad revenues.
With the current trajectory of year-on-year Super Bowl viewerships in the United States of America, as well as the marketability of NFL’s biggest stars such as KC Chiefs’ Patrick Mahomes, you can expect the total advertising revenue to only continue rising in the coming years for the domestic broadcasting networks. This year, American broadcasting network CBS has punched the lucky ticket for the rights to broadcast Super Bowl, as they are surely in for a big pay day of their own, considering that they have already sold out their advertising inventory all the way back in November of last year, nearly 3 months before the event, reportedly charging similar to Fox’s 6.5-7 million USD 30-second advertising fees.
Conclusion
To reach a definitive conclusion for today’s topic at question, Super Bowl and particularly the broadcasting networks covering the Super Bowl, are able to bargain such high advertising fees due to the intense competition amongst large American corporations which stems from the incredibly high annual viewership of the event. The viewership itself stems from the marketing aspect surrounding the event, specifically the half-time show. You can point to the reason for such high fees for airing a 30-60 second commercial using this chain: Marketing ->Viewership -> Competition. Whatever your views are on the traditional halftime show, one thing is clear - as far as marketing is concerned, it works. Michael Jackson started the marketing “revolution” for the Super Bowl with his performance at the event’s halftime show in 1993, which grossed the record at the time viewership of 133.4 million viewers, and laid the groundwork for this figure to only keep growing year-on-year. Despite the large opposition from the fans, it is understandable why the UEFA toyed around the idea of introducing a halftime show of their own in the halftime of the Champions League Final, given how this marketing strategy holds potential for such large revenues.
Written by Arsen Ashlyayev | Proofread by Amina Meiirkhan
