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January 31, 2014

The rules of the Super Bowl ad game

WASHINGTON — It's one thing to create a buzzworthy commercial packed with celebrities, hot babes or that old reliable, Stuff Blowing Up. You'll see plenty of that during Sunday's Super Bowl telecast, from Budweiser's puppy-meets-Clydesdales spot to Jaguar's cinematic extravaganza on behalf of its new $65,000 coupe.

But it's quite another thing to figure out how to deliver all that would-be buzziness to the most people at the lowest possible price.

That's the game within the big ad game, the multimillion-dollar Super Bowl sponsor challenge. Advertisers know their commercials will be seen by tens of millions of people, and that airtime will sell for appropriately ludicrous amounts. This year, the average cost of a 30-second commercial will be about $4 million, or $133,000 per second, about the same as last year.

But, as the ads often say, your results might vary. The average cost is all but meaningless to Super Bowl sponsors, who cut complicated deals with the game's broadcaster (this year, Fox), often many months in advance. What advertisers really care about is an ad's "efficiency," or its cost per viewer.

Figuring that out is harder than you'd think - "more art than science," as marketing professor George Belch of San Diego State University puts it. The calculation involves some educated guesswork about when to buy a Super Bowl ad, how much to pay and where to place a spot during the nearly four-hour broadcast.

The process is complicated by an unknowable factor: Will one team dominate, or will the game be close? And for how long? It matters - a lot. Viewers stick around for competitive games but leave by the millions during a blowout. The NFL found this out to its chagrin in the 1990s, when ratings dipped for a series of lopsided games.

The rules of the Super Bowl ad game have evolved over the preceding XLVIII years and are evolving still in the age of social media. Here are a few of the basics:

Rule No. 1: No one pays the sticker price.

The Super Bowl advertising marketplace is like a Turkish souk: Everyone haggles.

Yes, $4 million is the average cost per ad, but the actual cost to an advertiser varies widely. The biggest advertisers - Coca Cola, Anheuser-Busch, General Motors, etc. - will pay far less than the reported average, says Marc Morse, senior vice president of media-buying agency RJ Palmer in New York.

The primary reason: Big buyers command big discounts. They buy multiple ad "units" - 30- and 60-second spots - spread over the game. Anheuser-Busch, for example, will run three ads for Bud Light and two for Budweiser. It also has a multi-year contract to advertise during the game, further reducing its overall costs.

No such luck for one-off advertisers, such as SodaStream, which markets do-it-yourself soda-making machines (and has lately been involved in a controversy over its decision to build a factory in an Israeli settlement on the West Bank). The company, whose ad stars Scarlett Johansson, paid top dollar for its single, 30-second unit, though President Yonah Lloyd declined to specify his cost. "For us, the Super Bowl is the perfect vehicle to educate the American consumer" about the company's products, he said in an interview.

And deals involving Super Bowl ads usually involve more than Super Bowl ads. Time during the big game is often sold as part of a package that includes commercials during other programs or on channels owned by the Super Bowl's broadcaster.

"The networks try to get you to buy other things," Morse said. "CBS [last year] said, 'If you want the Super Bowl, you have to [buy] March Madness. This year it was, 'If you want the Super Bowl, be prepared for an equal spend on Fox [Sports] 1,' " a Fox-owned cable network.

Rule No. 2: Buy early, save later.

Spending millions on a Super Bowl ad isn't all that different than spending a few hundred on a plane ticket or hotel room. The sooner you buy, the lower the price is likely to be.

Many advertisers buy at the "upfronts," the annual meetings between network sellers and advertising buyers, held in June. As a result, much of Fox's "inventory" of Super Bowl time was spoken for by last summer. (Fox declined to comment for this article.)

As long as there's demand, prices for whatever is left tend to rise as the game gets closer. But on occasion, it pays to be patient. When Detroit's slumping automakers passed up the game during the worst years of the recession, last-minute advertisers snapped up unsold spots at bargain prices.

 Rule No. 3: First in, last out.

 Advertisers pay extra to air commercials in the first and last positions in a "pod," or cluster of commercials. These are considered the most-watched and the most memorable positions.

 Basic inertia explains why it's good to be first: People haven't jumped off the couch yet as the game stops for the commercial break. Anticipation explains why the last spot is primo: People are rushing back to their seats as the game gets set to resume.

Rule No. 4: Buy early in the game, too.

Advertisers tend to clamor to show ads in the first half of the game and usually in the first quarter. The reason? It's when the audience is most stable, most predictable and most attentive to the advertising.

"It's the safest place to be," says Jennifer Clayton, the manager of advertising planning and buying for Virginia-based Volkswagen of America, which is airing a humorous one-minute ad in the second quarter (in the first "pod" position of the second ad break) Sunday. "The game hasn't been determined, and there's a lot of hype about what the brands are doing. People focus on that."

Which is why advertisers pay premium prices for ads shown during the first half.

Second-half advertisers, meanwhile, not only risk losing droves of viewers to a bum game, they also have to fight viewer fatigue.

 "A lot of people are watching the game at parties. They've been there for hours, and they're getting tired," says San Diego State's Belch. "By the third or fourth quarter, the same enthusiasm is just not there.' So, you're rolling the dice a little bit" by placing an ad during this part of the game.

 Last year, the bet paid off. According to the Nielsen ratings service, the audience for the Ravens-49ers contest grew by 25 percent from its low point to its high point, peaking at nearly 115 million viewers late in the second half of what turned out to be a dramatic game.

Although that result delighted fourth-quarter advertisers - Big audience! Low price! - it was a fortuitous result, Morse said. "You can look like a genius [under those circumstances], but you can't really plan it," he said. "If we could, we'd be running the world."

Rule No. 5: You need ads for your ads.

A Super Bowl commercial is just the start of an advertiser's advertising . . . about its Super Bowl advertising.

The commercial is just the middle. Thanks to social media, companies engage in a buildup about their ads before the game, and most follow up afterward, too.

 Volkswagen says it was the first advertiser to release its Super Bowl ad online before the game in 2011 (for a charming spot called "The Force"). It also says it was the first to release a teaser ad, called "The Bark Side," for its Super Bowl commercial in 2012. The effort propelled its commercials to viral status.

(Well, technically, Apple may have been the first advertiser to "pre-release" its legendary "1984" Super Bowl ad 30 years ago by quietly airing it a few times in places such as Twin Falls, Idaho, in late 1983; it did so to qualify the commercial for advertising awards.)

Now, pre-release promotion is common. Many advertisers have released teasers on YouTube, Facebook and other platforms. And many advertisers release the ads themselves days before the game, seemingly undercutting their big-game "reveal."

The idea, of course, is to create buzz before the buzz starts.

SodaStream's Johansson commercial, released this week, led to calls for a boycott of the Israeli-based company; a Cheerios commercial featuring a biracial family also got media attention after Republican National Committee Chairman Reince Priebus objected to MSNBC's characterization of it in a tweet. (MSNBC tweeted, "Maybe the rightwing will hate it, but everyone else will go awww," but then withdrew it and apologized.)

This year, Volkswagen promoted its Super Bowl commercial with a teaser ad making fun of Super Bowl ads. It will also run mobile ads mentioning its Super Bowl ad after the game in an effort to capture residual interest, according to Clayton.

But there's a limit to how much anyone can keep hyping the hype; search-engine queries for Super Bowl ads start to fall quickly about 48 hours after the game ends, she said.

 At which point, of course, the company will be thinking about the 2015 Super Bowl.



 

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