This Year’s Deflategate: The Ads

By: Sumeet Goel

February 25, 2016

I was lucky enough to attend Super Bowl XL. The experience is one in a million. Two top teams, amped up to play the most important game of their lives. But then the live action just stops, for what seems like a really long time. Why? The network is airing commercials.

Super Bowl ads have become as important as the game itself. Over the years, a whole cottage industry has exploded, starting with the USA Today day-after analysis and ad-meter ratings and now including pre-releases, extended versions, Twitter feeds, mobile tie-ins and more.

In the stadium we were treated to a few select commercials on the Jumbotron, including the acclaimed Doritos ad that I loved. Otherwise we were blissfully unaware of the ads, other than having to sit through the aforementioned interminable delays.

Having missed most of the ads during the game, I went online the next day to see which commercials got the most hype. I was disappointed. I found a couple interesting ads but lots of boring ones. The usual suspects and common themes, and not a lot of excitement.

That confused me, particularly given the data on ad costs and viewership over the years:

In what industry can you justify a 3.6X price increase with less than 20% increase in demand?  Or more recently, 60% increase in rates in the last 5 years, while viewership has been flat?

The age-old rationale is that of eyeballs: Where else can you get this many viewers all together in one place (9 of the top 10 rated shows of all time are the last 9 Super Bowls)? But it doesn’t make much sense given the push toward data-driven behavioral advertising.

I have two theories on why these ad rates continue to climb.

  1. Relationships. By unofficial count, about 75% of the Super Bowl ads were from companies that have a pre-existing advertising relationship with the NFL. They are official league sponsors for a category, or have been heavy advertisers during the year. If you want to continue to have those eyeballs throughout the season, then you should probably pony up the money for an ad.
  2. Non-TV. I’m wondering if non-broadcast related traffic and eyeballs make the actual ad worth it on some level. That is, you’re paying $5mm for the 100mm+ viewers of the show, but in reality you’re banking on the pre-Super Bowl, during-Super Bowl, and post-Super Bowl viewership of those ads on various platforms. You’re counting on the mobile/online tie-ins, increased traffic to your site, Twitter and Instagram tie-ins. That’s what justifies the expense.

The first one I can understand on some level. Quid pro quo. I wonder about the second one, however. Is the cost of a game-time commercial worth it when you have companies like Gatorade running a Snapchat ad with Serena that had 100mm+ views by the day after the Super Bowl?  Or Esurance offering up to $50,000 to folks who retweeted their post-game ad hashtag, plus a $250k grand prize, for a record 2.5mm retweets and 1.5 BILLION media impressions? Or Wix.com with their online hub, YouTube channel, four teaser ads and 36mm+ views of their online ads on top of their 30 second in-game ad?

When I see stats like “The 10 most viral ads were shared 36% less than in 2015” and “Almost half of last year’s advertisers did not advertise this year”, I wonder if the future might see a change in Super Bowl ad rates. Or maybe not. After all, this is the NFL and if there’s one thing we’ve learned, professional football is a freight train that is incredibly hard to derail!

Food for thought. Doritos, anyone?