It Looks Like The Price Of Super Bowl Commercials Can’t Go Any Higher
We’re a few days out from the Super Bowl, which is both the NFL’s championship game and the biggest day of the year for TV commercials. Those ads draw tremendous viewer interest, and this year Fox is charging advertisers more than $5 million just for 30 seconds of air time. But while ad rates have soared in recent years, some indicators seem to suggest that rapid growth in Super Bowl ad rates may soon come screeching to a halt.
Five years ago I suggested that Super Bowl ad rates could double from $3.5 million to $7 million within a decade (from 2012 to 2022). My reasoning was that the networks had room for price increases – at that point in time Super Bowl ads represented a tremendous bargain in terms of cost per viewer – and that the networks would need to take advantage of that pricing power to cover the greatly increased spending caused by a new set of TV deals with the NFL.
Thus far that prediction has been right on track. We’re halfway between 2012 and 2022, and this year Fox is reportedly charging an ad rate of between $5 million to $5.5 million per 30-second commercial, which is right at the mid-point between $3.5 million and $7 million.
But while ad rates have surged at a rapid clip, it’s appearing increasingly unlikely that they’ll be able to keep up this growth rate. In fact, there may not be much room at all for any further price increases.
Advertisers often measure their spending in CPM, or their cost per thousand viewers. And once upon a time, the Super Bowl’s low CPM reflected why companies were often so eager to air commercials during the game. Advertisers airing commercials at Super Bowl XLV in 2011 paid $3 million to reach an audience of 111 million people, or the equivalent of a $27 CPM. With hit shows posting CPMs of $35 or more, the NFL’s title game…