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Is TV Advertising Always a Touchdown?

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With the Super Bowl this Sunday, the advertising world is abuzz with predictions on what to expect from the top spenders and advertisers. At least they can count on the fact that TV ads continue to be trusted, and probably will for some time. Newspapers and Magazines are still most trusted forms of advertising, with almost two-thirds (63% and 62%, respectively) of consumers trusting advertisements from those sources. Television is not far behind at 61% (1). TV ads are also cited as very influential, with 68% of consumers indicating that they always or sometimes take action on something after viewing a television ad. And despite the rise of digital ads, TV accounts for the largest amount of advertising dollars spent, with over $63 billion spent in 2012 (Internet ads were a distant second, at $36.6 billion) (2).

Not all is rosy in the world of television advertising, however. Nielsen’s latest report shows that the amount of live television watched has dropped, while DVR playback is rising in popularity (3). DVRs make it more difficult for advertisers to reach people by giving consumers a simple way to fast forward through commercials (4). However, live television programming doesn’t seem to have the same problem, as people tend to want to watch things like awards shows, news, and sports programming live, thereby foregoing the option of fast forwarding through commercials. Evidence of this can be seen in Nielsen’s annual list of highest-priced prime-time broadcast shows: Five of the top ten most expensive 30-second spots were held by live programming (See Figure 1) (5

Hi Megan

Football is King

Alone atop the charts by a wide margin is NBC’s Sunday Night Football; it’s $593,000 cost for 30 seconds of ad time beat second place American Idol by almost a quarter-million dollars. In addition to charging the most for its advertising spots, SNF was also the highest-rated show in prime time for the 4th consecutive year, averaging over 21 million viewers. On the cable side of the coin, ESPN’s Monday Night Football averaged almost 14 million viewers, and had six of cable’s ten biggest audiences for the entire calendar year, further cementing football as king of the TV viewing pantheon (6).

As impressive as those numbers are, the NFL’s playoff broadcasts dwarf its’ regular season viewer totals. The 2014 AFC Championship game on CBS two weeks ago drew a whopping 51.3 million viewers, while the NFC Championship did even better, with 55.9 million viewers tuning to FOX for that game (7). But even those games probably won’t hold a candle to the ratings that Super Bowl XLVIII will draw this Sunday, as 108.4 million people watched last year’s iteration (8).

The Super Bowl: An Advertiser’s Mecca?

The Super Bowl is a unique television event in America, partially because it’s consistently the most-watched broadcast of the year by a margin of tens of millions. It’s also the only event where a majority of viewers are just as excited to see the advertisements as they are the game itself. In fact, 78% of Americans look forward to the commercials more than the actual game (9). Knowing this, it should come as no surprise that the Super Bowl’s ad slots are by far the most expensive: A whopping $4 million dollars per 30-second spot this year (10).

But is it worth it? Conventional wisdom leads me to believe that, with an audience that big and a much higher-than-normal proportion of them paying attention to the commercials, it’s probably worth it. Some advertisers agree, with one calling it the nation’s biggest bargain. When executed correctly, the PR buzz generated by a great ad during the Super Bowl can more than make up for the game’s high cost (11).

Other advertisers believe that it’s nearly impossible to see a return on investment from the Super Bowl, with notable past participants like E-Trade deciding to duck out this year (12). Unsurprisingly, ad awareness for Super Bowl spots is higher than other ads with similar exposure. However, brand association is actually lower for Super Bowl spots than for others, suggesting that consumers tend to remember the ads more often, but remember the actual brands and products less often. The end result is that people remember what happened during the ads, but a full 80% of ads themselves don’t drive sales due to people not remembering the products (13).

To Buy or Not To Buy?

So the question remains... are Super Bowl ads worth it? It depends on who you ask, but it also depends on what you’re selling and how you try to sell it.

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