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Super Bowl commercials cost $7 million. It’s still a good deal

By Frank Pallotta, CNN Business

Super Bowl commercials are more expensive than ever. But for advertisers, they’re a better deal than ever.

NBC — which is broadcasting this year’s game — announced last week that it is sold out of Super Bowl ads, with multiple 30 second spots having sold for a record $7 million each.

Why would advertisers spend $7 million on one ad? Because it’s the Super Bowl — a broadcast that is still watched by roughly 100 million viewers, even as ratings for some other big sporting events are falling.

Nothing in the media world comes close to getting companies the exposure that the Super Bowl can. That’s increasingly important as the media landscape grows more fragmented, according to Patrick Crakes, a former Fox Sports executive turned media consultant.

“The fractionalization of attention because of streaming and social media makes the Super Bowl more important than ever,” Crakes told CNN Business. “If you’re in business with the NFL and you’re advertising during the Super Bowl, you’re a real player.”

Crakes added that there’s also examples of the big game “helping build brands.”

“Think about a company like GoDaddy. GoDaddy invested in the Super Bowl for years, did a lot of crazy things to get attention inside it, and it helped their business,” he said. “I think it’s a great investment, even at this price tag.”

“You’re getting close to $500 million”

The Super Bowl — and the ads that come with it — is also a great investment for networks.

We don’t know yet what NBC will make in terms of ad revenue for this year’s broadcast. However, it’ll likely be a sizable chunk of change, according to Tim Calkins, a marketing professor at Northwestern University’s Kellogg School of Management.

“You’re likely looking at about 70 ads, so you’re getting pretty close to $500 million in ad revenue from the game for NBC,” Calkins told CNN Business. “And that, by the way, is just during the game. That doesn’t count before the game, after the game and all of the other opportunities there are to run additional advertising.”

For example, last year’s Super Bowl notched $434.5 million of in-game ad revenue, according to research firm Kantar. That’s more than the World Series and NBA finals and second only to the Olympic Games, which take place over a span of weeks.

Kantar noted that this year’s game — which pits the Cincinnati Bengals against the Los Angeles Rams — is projected to surpass last year’s numbers. (NBC shares the Super Bowl rights with the NFL’s other TV partners every couple of years.)

“$500 million is a lot of money for anyone, but in the world of media, Super Bowl spots are in a whole other level,” Calkins said. “That is why the NFL is such a valuable sports franchise, because there’s this ability to charge advertisers this much to be on these events.”

“A lot of people watching the Super Bowl don’t really care about the game”

TV is going through a rapid transformation because of the streaming revolution, but the NFL continues to be one of the ratings bedrocks for traditional networks.

The league’s viewership for the 2021 regular season was up roughly 10% overall from last year, bringing in an average of 17.1 million viewers per game.

That is the highest regular season average since 2015, according to the league, and comes at a time when ratings for other big live events — such as awards shows — are experiencing record lows.

Calkins explained that for networks like NBC there’s “two big benefits” to being in business with the NFL and broadcasting the Super Bowl. The first is the surplus of ad revenue and the other is “NBC will use this opportunity to support the rest of their lineup” via promos before, during and after the game.

“For NBC, the Super Bowl is an event that they can use to jump start the rest of their lineup as they go into the spring and the rest of the year,” he said.

Calkins added that “a number of years ago, people said, ‘the Super Bowl is going to fade away. It’s getting unsustainable.’ It’s completely the reverse.”

“The Super Bowl is more and more important because it’s a shared experience,” Calkins said. “And what’s interesting is a lot of people watching the Super Bowl don’t even really care about the game. They’re watching the ads.”

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Article Topic Follows: Football

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