Super Bowl Commercials
There is no time for bathroom break during the Super Bowl. It’s the annual, most anticipated championship game of NFL. And the commercials are also a must watch. In this post, we will look into super bowl commercials and how they work including pricings, and slot assignment. This is related to advertising part of the class and uses some concepts in sponsored search.
Viewed by over 100 million audiences on TV and live streams, Super Bowl’s commercials have lots of interested buyers. Firms appreciate its value because this is once in a year opportunity to reach such a massive audience. According to Rentrak 98.8 percent of Super Bowl audiences stayed tuned during the ads. So companies are willing to pay a lot. During Super Bowl 55 in 2021, the opening bidding price for a 30 second commercial spot is at $5.6 million, which was the average cost or last year’s game.
The NFL usually allows 1.5 minutes per commercial break. Over the whole game this adds up to approximately 45 minutes of commercials time. The broadcasting network will take a quarter of them to promote its own shows. And the rest are open for other companies.
This reminds me of sponsored search where there are different slots and advertiser bid for them. Super Bowl 54 set what was then a record for the price of a Super Bowl advertisement, selling 58 spots and generating $75 million for NBC. The most expensive advertisement was sold for $5.84 million.
We can find some interesting observations when analyzing deeper. Ads in the fourth quarter of the game tend to be less expensive than those in the first quarter. Also whether it is positioned at the beginning or the end of the commercial pod matters. Viewers might to use the bathroom or run to the fridge during ad breaks and are less likely to see the mid-pod spots. Thus the “A” and “Z” pods tend to be more desirable and costly.
However buyers can also have different values for the slots just like what we saw in the homework problem. For the earlier slots, the game can still be won or lost by either team. On the other hand some viewers will tune out if the match is hopeless by the second half.
But some advertisers prefer the second half in case the Super Bowl turns out to be a nail-biter. The fourth quarter is a trickier choice. If the game is a landslide, people will probably stop paying attention and the ads loose viewers. But if the game is close, viewership during the fourth quarter will expands exponentially.
The pricing is also affected by other factors. For example, what advertisers actually pay varies based on where the ad runs in the game, whether the marketer has opted for a package deal with pre or post-game coverage, and the amount of units that have been purchased. There are also some special cases. The Winter Olympics and Super Bowl were shown by the same network in 2018, NBC offered advertisers the opportunity to purchase packages of time for their ads covering both Super Bowl LII and the Olympics.
source: https://www.newsweek.com/super-bowl-ad-cost-2021-how-much-commercial-costs-1567089