The Super Bowl of Sponsorships
Wed, 12/05/2012 - 10:45 — AJ Maestas
With December underway and playoff football drawing closer, people throughout the advertising world are starting to prepare for their version of the Super Bowl, which just happens to be the actual Super Bowl. But for all of the hype and attention given to the 30-second spots that will air during the National Football League’s championship game, we’re going to take a moment to caution marketers to beware of spending on commercials with the intent of moving the business needle. In our opinion, the money spent on one of those commercials could almost certainly be better spent on a sponsorship.
First, let’s take a quick look at the details of a Super Bowl spot. One of our greatest pet peeves is when people say that the Super Bowl is viewed by 1 billion people. It is not. Not even close. The potential viewership is said to be 1 billion because it airs in more than 200 countries, but the actual viewership number is much lower. Super Bowl XLVI, which featured the New York Giants’ thrilling win over the New England Patriots this past February, had 111.3 million viewers, according to Nielsen. This made it the most watched program in history, edging out the previous Super Bowl’s 111 million viewers.
Obviously, those are huge numbers. But of course, so is the cost of reaching that many people. Super Bowl XLVI had an average rate of $3.5 million for 30 seconds. The upcoming Super Bowl ads have reportedly sold for between $3.7 million and $3.8 million. When broken down, this results in a CPM (cost per reaching 1,000 viewers) of $31 for the previous Super Bowl and $34 for the upcoming game if viewership remains steady. Typically, CPMs for television ads will only reach those levels if the audience is a targeted and desirable demographic, but the Super Bowl is basically a snapshot of the general population.
To be fair, there are reasons brands are willing to pay such a high rate. Sports in general are getting more expensive for advertisers because they’re one of the last reliable genres of appointment viewing, meaning no DVR and no fast-forwarding through commercials. Additionally, the breaks in the action are the main attraction to many Super Bowl viewers, so the chances of getting muted or ignored for a food/bathroom break are even smaller than usual. There’s also the fact that many media outlets review the commercials in the days after the game and the best ones can go viral and be viewed online afterward (or in some cases now, even before). Chrysler’s “Halftime in America” ad featuring Clint Eastwood from this past February has more than 11 million views on YouTube. If a Super Bowl commercial is a hit, it can definitely reach an incredible amount of people.
The problem, though, is that this is an enormously expensive gamble – after all, not all ads are hits – and even if it does register and resonate with viewers, 30-second spots simply don’t move the needle like sponsorships. During speaking engagements, when comparing the impact of ads versus sponsorships and the numbers, people always seem to sit up in their seats. From a television perspective, we have seen studies showing that people who actually see an ad are 3%-5% more likely to purchase the advertiser’s product. With sponsorships, however, our custom market research has shown that fans of a team who are aware of a sponsorship are twice as likely to purchase the sponsor’s product and three times more likely to recommend it than the general population. Or in other words, while television ads are making a 3%-5% impact, sponsorships are making a 200%-300% impact.
Now, are there many sponsorships that can reach 111 million unique people for $3.5 million? No, there are not. But all of those viewers won’t actually see the commercial, and the brand only has 30 seconds to try to reach the ones who do. If the ad fails, that’s $3.5 million wasted. We’re not saying all ads are going to fail and we’re not saying that there aren’t occasions when the money might be worth it. But we think the risk always outweighs the reward, especially when there’s a better option.
If that money is spent on a major sponsorship with one team, whether it’s in the NFL or another sport, the brand has year-round opportunities to reach attendees and viewers in the home market, as well as viewers in each of the opposing markets. And these fans can be reached in a variety of ways that extend beyond media. It’s also worth noting that the audience will be more targeted than the Super Bowl audience – we tend to see team fan bases in major US sports skewing male, younger, educated and affluent – and this audience will be more passionate, making it easier for the brand to see lifts across a variety of metrics.
While 30-second commercial spots during the Super Bowl may be splashier and achieve the objectives of reaching a gigantic live audience to generate awareness, sponsorships are going to create brand loyalty and drive a positive return on investment, which are the primary objectives of most established brands.