Are Super Bowl Commercials Worth It?

The NFL’s final game, the Super Bowl, is known for a few things: football, wings, pizza, beer, the half-time show, and commercials. Interestingly, it is a rare opportunity for brands where viewers are eager, not reluctant, to watch ads – and even go as far as rewatching the best ads on YouTube the next day. In fact, a CNBC survey showed that 97% of viewers agree that they enjoy Super Bowl ads. If done successfully, the best Super Bowl ads can generate buzz and awareness that can last a lifetime and completely change a company’s trajectory. In a world where viewers are constantly bombarded with targeted advertisements in their every day life, the Super Bowl is a marketers opportunity to really grab the viewers attention and differentiate their company from the pack.

However, there is a major (and rising) cost associated with running a Super Bowl ad. This year, the price per 30 seconds of ad time was $6.5M USD.

Although viewership increased by 16% this year to 112.3M, the cost per viewer continues to rise. As AAARL helps organizations better use data and analytics to make more informed decisions - we got curious if advertising at the Super Bowl is truly worth it. Let’s dig into the numbers and find out.

Measuring Success

Just like any marketing campaign, the metrics you want to look at to determine whether the ad was a success (or failure) depend on your organizations objectives and goals for the ad. You may want to boost awareness(ad views, impressions), want to increase leads (follows, engagement, emails, etc.), or actual conversions (sign-ups, downloads, sales, etc.). For this exercise, we will attempt to look at a few different metrics and compare it to other advertising avenues.

Super Bowl – by the numbers

This year, 112.3M people in the US viewed the Super Bowl. The average cost of a 30-second ad was $6.5M USD.

CPM

The first metric we will look at is CPM – or cost per mile. This is quite a common metric that marketers use to determine the amount that advertisers pay per one thousand viewers of the ad.

Numbers from: https://www.topdraw.com/insights/is-online-advertising-expensive/

At initial glance, the CPM of the Super Bowl does not seem great compared to online marketing channels or other traditional marketing avenues. However, it is also important to take into account the qualitative measure of effectiveness when comparing these platforms. For example, some of these methods (billboard, Facebook, etc.) will reach a lot of people who might only give it a quarter second of attention. In comparison, a Super Bowl ad (if good) captures 30 seconds of people’s attention. Additionally, this does not include the YouTube views and other general chatter that ads provide at the Super Bowl.

Conversions

Measuring if the ad is worth it gets even more difficult when looking into conversions– as the number of conversions expected really depends on the type of ad and company. For example, car companies may see less of an immediate uptake in sales versus beer companies. To try and do this, I am going to isolate Crypto companies, as multiple companies had ads for the first time this Super Bowl.

One prime example is Coinbase’s now famous ‘QR Code’ ad. This ad, featuring a bouncing QR code that led users to a signup page, had 20 million hits within 1 minute. Apparently, they paid $14M USD for the ad, meaning that their CPC (cost per click – a common marketing metric used to measure conversion rate) was $0.70.

Comparing this to other advertising methods, you can see that this was an extremely effective ad placement. This also doesn’t include the social media impact and days of coverage that Coinbase received from this innovative ad. In fact, they had the more online engagement (386,073) and total mentions (21,256) than any other brand on twitter throughout the game.

Looking at it from a different angle, Coinbase’s Customer Acquisition Cost (CAC - a measurement to see the cost of getting a customer to purchase a product or service) in 2021 was $5.15.

From this calculation you can see that Coinbase would need a 13.6% conversion rate to match their 2021 customer acquisition cost. Although that is higher than the typical website conversion rate, the fact that most people going to the website after seeing the ad were very qualified buyers, along with a 309% increase of app installs- we can assume that it was a very successful campaign. Plus this is all based on the clicks for the first minute after the ad played – the final tally is probably significantly higher than 20 million hits.

Obviously, this is just one example of how a Super Bowl ad can be very successful. Although, this trend was seen with other crypto company ads, as they collectively had increased downloads of 252%.

So, is it worth it?

The truthful answer is… it depends. Depending on your goals, marketing strategy, current CAC’s, target market, and a whole suite of different factors. However, one thing is for sure – Super Bowl commercials can be worth their high cost and provide advertisers with even bigger returns than what they pay for. However, it has to be a good ad with clear objectives of what they want to achieve. Additionally, having an important social strategy to increase the chances of your ad going viral is equally as important as the ad itself. Especially in a world where TV ratings for other events like the Olympics, Grammys, and Academy Awards have declined drastically – the Super Bowl is a marketers one opportunity to really make a name for their brand and do something special.

Overall, I believe that Super Bowl ads are worth it for certain organizations at certain times in their growth trajectory (adding a new product, in the exponential growth phase, etc.), but are not worth it for many other companies.

If you want to be able to dig into the numbers of your marketing campaigns and better understand and improve their impacts and ROI - reach out to AAARL today for a free consultation and learn about how we might be able to help!