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VOL. 41 | NO. 4 | Friday, January 27, 2017

Super Bowl ads face declining demand, value

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Super Bowl advertising sales have been slow-going this season, with only 90 percent sold by December of last year.

While that might sound like solid performance given the big game isn’t until February, consider that Super Bowl ads usually sell out in September or October given how long it takes advertisers to produce their big-game spots.

These are the primary factors driving this slowdown in ad-sales performance.

NFL ratings are down notably this season. While NFL executives cite the distraction of last year’s presidential election as one possible reason, a more significant factor is the change in consumer viewing habits.

Sports news, social media and fantasy football apps provide real-time video highlights and game stats, motivating countless consumers to forgo traditional network viewing options.

To make matters worse, NFL RedZone offers succinct highlights of every game, with absolutely no advertising, thus cannibalizing the traditional viewing experience – something NFL execs hadn’t counted on.

RedZone has aligned itself with shorter consumer attention spans.

Ads also are getting to a nearly ludicrous price point at approximately $5 million to $5.5 million for a 30-second spot, compared with a “mere” $2.5 million for the same length spot in 2010.

And the ad cost is just a piece of a brand’s total investment considering it can easily cost upwards of $1 million to produce a spot of that caliber.

Plus, to get your money’s worth out of a Super Bowl ad these days, you must invest heavily in a supporting digital strategy, which can easily run another $5 or $10 million.

Advertising in the big game is a big investment all the way around.

With this increased investment comes higher risk, as brands are scrutinized by the nation about their big-game performance.

When Super Bowl advertisers fail, they fail publicly on a grand scale. Just ask Nationwide, which ran an ad featuring a dead child in 2015 that brought it widespread public criticism.

Even mediocre ads can see backlash as the bar for success is so high.

Given how affordable and targeted digital advertising is in contrast to Super Bowl advertising, many brands are bowing out of the big game in favor of a more predictable return on investment. They might still invest in a high-production ad, but instead run it before and after the Super Bowl with a heavy digital advertising buy to support it on game day.

While Super Bowl ads will no doubt sell out again this year, marketing executives have definitely been hesitating on pulling the trigger, likely driving down costs from what Fox execs hoped to pull in.

And this, combined with declining NFL ratings, could cause network execs to reconsider the value of Super Bowl ads in future years.

Lori Turner-Wilson, CEO and founder of RedRover Sales & Marketing Strategy, can be reached at redrovercompany.com.

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