Super Bowl commercials cost millions. Here's why advertisers think it's worth it

The justification goes beyond the over 100 million viewers.

Feb 9, 2024 - 00:30

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Super Bowl commercials cost millions. Here's why advertisers think it's worth it

A 30-second television ad spot for Super Bowl LVIII costs advertisers a whopping $7 million.

For perspective, Front Office Sports laid out the historical ad costs of the Super Bowl and adjusted the costs with inflation. A 30-second commercial in 1967 cost $42,500 which is about $372,000 today.

Already taking into account the adjusted number, today's Super Bowl ad costs nearly twenty times more than it did in the past. And according to Mark Douglas, CEO of software advertising company MNTN, the $7 million price tag is a lot more expensive than a typical ad spot when measuring it per viewer.

"The price for a Super Bowl commercial on a cost per 100 views basis is not [just] a little bit more than others," Douglas told TheStreet. "It's about quadruple more expensive than the typical ad on."

But advertisers are still able to justify this cost for several reasons. First and foremost is obvious: the volume of potential eyeballs at one time on the ad.

"There's not many moments to reach 100 million in the same 30-second unit of time," Douglas said.

The Super Bowl is one of the rare occasions that such a large number of Americans are tuned into the same thing. Add to that the fact that the Super Bowl this year could break the average viewership record of 115.8 million set in 2014.

There have been viewership records in the AFC Championship Game and the Divisional Round set this year, and last year's 115.1 million viewership during the Super Bowl was second most all-time.

The volume and diversity make the Super Bowl the perfect time for advertisers to grow awareness for new products, according to Columbia University sports management professor Joe Favorito.

"It's prime real estate — it's like a Picasso," Favorito said. "If you want to use that as your plan to launch a product or create a buzz, it's an audience you can't get anywhere else. It's just the way television is structured today."

But there's a lot more than just the audience volume. Douglas said that advertisers bake in everything — including the buzz created by social media or when other media outlets write about certain ads. That's additional publicity that just doesn't happen for traditional ads in any other setting.

"[Companies] realize that it's earned media views also because there is all this analysis of what was the best Super Bowl commercial," Douglas said. "The earned media views could be [worth] a few hundred million also.

Favorito said companies strategically plan whenever they drop top dollar on a Super Bowl ad such that there is a full integrated marketing strategy behind it. Companies aren't just relying on the one ad — he called it like a "front porch" for a total activation — and that's what could justify the millions.

"The key is you just can't respond without an activation tied to it," Favorito said. "It should be much more of a launchpad and awareness as to what you're doing because it's a really expensive buy and it's got to be integrated across everything you do."

The media landscape continues to change as more companies diversify their marketing spend across social media, streaming, and other forms of media. But the Super Bowl remains a constant in attracting eyeballs, another sign that sports are a key cog in bridging the gap between linear and streaming.

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