GM’s Ads a Bargain If Super Bowl Audience Is Record

$3 Million Commercials a Bargain
General Motors Co. television commercial which will air during Fox's Super Bowl, is seen in this screengrab. Source: General Motor Co. via Bloomberg

Super Bowl advertisers Audi AG and General Motors Co. may end up getting a bargain for 30-second spots costing a record $3 million or more, if the audience for the Fox telecast reaches new highs as forecast.

The Feb. 6 National Football League championship between the Green Bay Packers and Pittsburgh Steelers may top the record 106.5 million viewers who watched last year’s game on CBS, according to New York advertising executives Peter Gardiner of Deutsch Inc. and Andy Donchin of Carat North America.

By buying up all the ads from News Corp.’s Fox in October, advertisers avoided paying higher prices closer to the game, when the cost can soar for the few spots that typically remain. Advertisers didn’t want to risk waiting because recent Super Bowls surpassed forecasts for viewers, said Scott Keogh, chief marketing officer of Audi of America.

“This is something we view as a very smart investment,” Keogh said in an interview. “This is our fourth Super Bowl, and every year has over-delivered.”

The cost of a 30-second Super Bowl spot peaked two years ago, when the Steelers, led by quarterback Ben Roethlisberger, defeated the Arizona Cardinals, 27-23. Advertisers paid an average $3 million that year, according to Jon Swallen, senior vice president of research for Kantar Media in New York. The price slipped to about $2.97 million for last year’s matchup between the New Orleans Saints and the Indianapolis Colts.

For this year’s game, Fox may have commanded more than $3 million, according to Laura Martin, an analyst with Needham & Co. in Pasadena, California. Swallen estimated the price at about $3 million.

Fox Record

“Sunday, Feb. 6, 2011, will be the single highest-revenue generating day in the history of Fox,” Lou D’Ermilio, a spokesman for Fox Sports in New York, said in an e-mail. He said the network doesn’t comment on advertising rates. Keogh declined to specify rates paid by Audi.

Martin estimates a 3.5-hour to 4-hour Super Bowl will generate $288 million to $300 million in advertising sales, exceeding the $213 million record set in the 2009 Super Bowl, according to figures provided by Kantar Media, owned by WPP Plc.

This year’s Super Bowl in Dallas stands to attract the biggest audience ever after NFL regular-season and postseason viewing reached records, said Gardiner, chief media officer of Deutsch Inc., part of Interpublic Group of Cos.

“If the regular season and playoffs are any indication, you have an American populace salivating for NFL football,” Gardiner said in an interview. “Football is on a roll.”

NFL Ratings

“NBC Sunday Night Football” led prime-time television ratings in the first half of the TV season, averaging 21.6 million viewers, 11 percent more than a year earlier and the most since the program started in 2006. CBS’s American Football Conference playoff games scored their highest viewer average in 23 years, New York-based CBS Corp. said last week.

The Super Bowl’s audience has grown for each of the past five years, according to Nielsen Co. data. In 2009, advertisers reached 98.7 million viewers on average with a 30-second spot.

The Super Bowl is sold at a flat rate, unlike per-viewer prices advertisers pay for most other programs -- typically $25 per 1,000 prime-time viewers, Martin said. When deciding whether to buy time, marketers usually assume the game will attract a similar-size audience to the prior year, she said.

“Despite the high prices, there’s a steady march of advertisers to replace those that drop out or reduce their buys,” Swallen said. “That gives a certain level of price support. It also helps make the Super Bowl one of the most coveted spots on television.”

‘Traffic Jam’

News Corp. yesterday reported second-quarter profit more than doubled to $642 million, or 24 cents a share, on sales of $8.76 billion, little changed from a year earlier. The Class A shares added 97 cents to $16.96 at 4:30 p.m. New York time in Nasdaq Stock Market trading.

New models and the auto industry’s rebound from the recession have led to a record six carmakers pitching as many as nine auto brands during the game, according to Swallen. Viewers may experience a “traffic jam” of competing ads, according to a Jan. 18 report from Kantar.

Daimler AG’s Mercedes-Benz is advertising for the first time. Detroit-based GM bought its first Super Bowl spots since 2008, prior to its bankruptcy, and BMW will run an ad for the first time in 15 years, according to Kantar Media.

To make sure its spot stood out this year, Audi considered six to eight variations and had test audiences vote on two finalists, Keogh said.

‘Cinematic Moment’

“You need to entertain and have some humor,” Keogh said. “You also need to tell a story. It’s a cinematic moment.”

Audi is using its Super Bowl spot to showcase a redesigned A8 luxury sedan, listed at the company’s website with a recommended base price of $78,050. The ad pokes fun at “robotic” luxury-car buying decisions, Keogh said. The A8 competes with the Mercedes S-Class and BMW 7-Series, he said.

In past years, Audi has seen foot-traffic spike at its dealerships and web-traffic spike on its sites after Super Bowl spots aired, Keogh said.

“Four years ago Audi wasn’t on the shopping list of tier-one luxury car shoppers,” Keogh said. “The Super Bowl has helped us tell our story and now Audi is among the top of that list. It’s not just a coincidence.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE