Sauder research: Super Bowl ads pay off

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Sports fans in the United States and around the world are gearing up to watch the highly anticipated Super Bowl, airing on February 2. With more than 90 million viewers, the football championship game is almost as well known for the commercials shown during the broadcast as it is the high-calibre players on the field.

Because of its high viewership, marketers pay a premium to secure commercial airtime during the game in hopes of turning a big audience into big bucks. But is the price tag for this airtime worth it?

A study co-written by Sauder marketing professor Charles Weinberg shows that, at least for movie marketers, banking on Super Bowl advertising can pay off.

“For marketers, advertising during major events, such as the Super Bowl, has become a supplement to other forms of marketing,” explains Weinberg, Sauder marketing professor. “They are spending a significant amount of money on this type of advertising, and yet, to our knowledge, there are no econometric studies publicly available to measure the effectiveness of these marketing expenditures.”

Their paper, “Playoff Payoff: Super Bowl advertising for movies,” shows that movie ads during the Super Bowl are more effective at increasing box-office revenues, when an average of $13 million is already being spent on traditional TV advertising, than those ads appearing during traditional TV timeslots.

A Super Bowl ad is 2.5 times more expensive per viewer reached than regular advertising. In 2004, a 30-second prime-time network TV commercial cost approximately $120,500, with a cost of $19.85 per thousand viewers. During the 2004 Super Bowl, the estimated cost of a 30-second ad is an estimated $2.3 million, a cost per thousand viewers of $51.26.

The study shows that the boost in box-office revenues due to Super Bowl advertising is primarily through an indirect effect on exhibitors. The movie ads shown during the event attract more theatre owners to distribute the films, making it more widely available to audiences, and resulting in higher revenues.

Using data from the American movie industry over three years, from 2000 to 2002, the study followed 300 mass-marketed movies, 19 of which were advertised during the Super Bowl.

In order to avoid the challenge of separating the effect that regular advertising has on revenues from incremental sales due to major-event advertising, the study focused on advertising for movies that were yet to be released. To determine the effect on revenues, researchers looked at box-office ticket sales from the movies’ first week of attendance.