NEW YORK/CHICAGO (Reuters) - The Super Bowl is still the prize of the advertising world, with companies paying up to $3.2 million for 30 seconds of commercial time, but more and more critics are questioning whether the pro football championship game is worth it.
“It’s so expensive to buy time and produce a Super Bowl ad, and you have so much competition and so many distractions, that you must hit an absolute home run to be able to get return on investment,” said Jim Cain, a senior vice president with brand communications firm Quell Group.
Companies spend heavily for commercials that are often entertaining -- but not always effective. “No one can convince me that flatulent horses help sell anything,” Cain said, referring to a spot once run by Budweiser.
Last year, Fedex and General Motors found the costs too high and skipped the Super Bowl. This year, Pepsico has decided to forego any ads for its beverages in the February 7 broadcast, breaking a 23-year streak.
“In an environment where people are on 24-7, it’s virtually impossible to actually build a relationship with them on the basis of one 30-second spot, whether it’s the Super Bowl or otherwise,” said Frank Cooper, who oversees brand marketing strategy for PepsiCo Americas Beverages. PepsiCo’s Frito-Lay snack division will air ads during the game.
Still, CBS Corp is hardly struggling to sell commercial time for the contest between the New Orleans Saints and Indianapolis Colts. Ad executives said prices for 30-second spots are running between $2.5 million and $2.75 million, with at least one selling for $3.2 million.
CBS declined to discuss specific prices but said nearly all of its commercial spots have been sold, and average rates have surpassed those of a year ago, when NBC broadcast the game.
It is no secret why CMOs are willing to write big checks. The broadcast draws about 95 million viewers, a giant number given today’s media fragmentation. And most people watch the Super Bowl live, a rarity in the age of digital video recorders.
What’s more, studies suggest many viewers pay attention to the commercials, not just the game.
A recent Nielsen survey found more people enjoy the ads than the action on the field; a new study by ad agency Venables Bell & Partners showed 66 percent of viewers remember their favorite advertiser from the 2009 Super Bowl, while just 39 percent remember which team won.
But not everyone is convinced.
“You’re never going to see us on the Super Bowl,” Mazda North American chief Jim O‘Sullivan said. “We’re not going to spend that kind of money on that kind of property.”
The economy isn’t helping matters. Not only has it put enormous pressure on marketing budgets, it raises questions of whether audiences will take offense to over-the-top advertising when so many Americans are out of work or losing their homes.
“Companies are cutting back on marketing and advertising budgets, so are they willing to go out and drop such a huge amount on one day?” said San Diego State University professor George Belch. “It’s more of an environment suitable for the bigger players with the larger budgets.”
These days, every Super Bowl ad campaign seems to be complemented by some digital or social media element, the new darlings of advertising. Unilever, for instance, will augment its Super Bowl commercial for Dove Men+Care with blog posts. Others are using Twitter or Facebook.
But does anybody want to read a blog post or text message touting a new commercial for body wash, razors or insurance?
“There’s no doubt that social media is going to develop into a very good avenue for advertisers,” said Villanova School of Business professor Charles Taylor. “Marketers haven’t completely figured out how to use it yet.”
Another issue is crafting the right ad for the Super Bowl. Most advertisers go for humor, which plays well for the many viewers who watch the game at parties. But with so many marketers banking on laughs, it’s tough for a brand to stand out.
Plenty of companies are betting they do. The roster of those advertising this year is expected to include major marketers like Anheuser-Busch InBev, Viacom’s Paramount movie studio and Coca-Cola; newcomers such as Dr Pepper; and even the evangelical organization Focus on the Family.
“I‘m pretty confident, as is the sports world, that these big events will remain high-profile as far down the road as you want to project,” said Neal Pilson, former CBS Sports president and head of consulting firm Pilson Communications.
Reporting by Paul Thomasch and Ben Klayman; editing by John Wallace