Future Of Super Bowl Commercials: Rising Costs Versus Outrageous Costs

By Jon C. Ogg Updated Apr 27, 9:50PM EDT · Published Sep 12, 12:20PM EDT

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Reports have been out that television advertisements are now around 90% sold out for the available 2013 Super Bowl television commercial spots. Even in early August the reports showed that the Super Bowl ads were about 80% sold out. We have also seen that the commercial spots are selling for a price above $4 million per 30-second advertisement. The simple question to ask is not just how funny nor how entertaining these commercial spots are.

There is a financial aspect and we are curious to know. Is this expense worth the cost anymore?

A cost of $4 million (or a tad more) for one single 30-second advertisement is a massive sum. The fact is simple that each commercial will get seen by millions and millions of viewers. But what if your hot commercial is edited down by the approval committee too much? What if your joke isn’t too funny or misses the obvious point? What if your product just doesn’t live up to the commercial hype? There are a lot of risks here associated with a $4 million advertisement for only 30-seconds.

The Week said in early 2012 that the last of the planned (omitting last-minute changes) ads had been purchased by Thanksgiving in 2011. The average cost was said to be above $3.5 million. Superbowl-Ads.com showed in early 2012 that Super Bowl advertising costs were up 17% over the 2011 Super Bowl.

What is amazing is that there appear to be only four different years where the cost of Super Bowl ads was down (2010, 2002, 2001, and 1971). Only one year (1992) saw an unchanged price. Here is a full chart from SuperBowl-Ads.com showing historical commercial costs for the big game:

It is hard to imagine that the Mean Joe Green and Coke Super Bowl commercial from 1980’s Super Bowl would have run for $280,000 that year when you consider a $4 million price tag for 2013. 1995 was the first year that the spots breached $1 million, yet by 2000 the cost had risen to $2.1 million when the tech bubble was so strong. The post-bubble and post-recession period took until 2004 to get back above that level in 2000.

If today’s figures are 100% accurate, the cost of a Super Bowl ad is going to be over 14% for Super Bowl 47 on February 3, 2012. The raw cost alone is high enough that the barriers to entry are becoming very high to advertise during the Super Bowl.

JON C. OGG

About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. a673b.bigscoots-temp.com.