The Super Bowl is more than just the pinnacle of NFL competition; it’s also an entertainment extravaganza featuring live musical acts and a cultural event that captivates audiences nationwide.
One of its most intriguing aspects is the way commercials grab viewer attention, creating a golden opportunity for brands willing to splurge on advertising.
Take, for example, E-Trade’s memorable 2000 ad with a dancing chimp.
This cheeky commercial playfully pointed out the absurdity of spending $2 million on a 30-second spot—an eye-opening commentary that resonates even today.
Rising Costs of Super Bowl Advertising
Fast-forward to the present, and recent reports highlight a staggering price tag of nearly $8 million for just half a minute of airtime.
This is a significant jump from only $4.5 million in 2015, underscoring the increasing value and fierce competition surrounding Super Bowl advertising.
Many companies, however, are not limiting themselves to brief commercials.
It’s common to see ads ranging from 60 to 90 seconds, and brands often seize the chance to air multiple spots throughout the game.
For instance, Tide dazzled viewers in 2018 with its innovative six-ad campaign.
The previously mentioned cost only covers airtime, leaving out expenses tied to star-studded performances.
Breaking Down the Expenses
Industry experts familiar with the ins and outs of Super Bowl advertising shed light on what brands can expect this year.
Here’s a closer look at the various costs involved:
- Agency Fees
Every commercial starts with an advertising agency.
Depending on whether it’s a retainer agreement or a one-time project, fees can vary widely, generally falling between $3 million and $6 million for Super Bowl work.
- Production Costs
After a concept gets the green light, it heads into production.
On average, producing the actual ad runs between $3 million and $4 million.
Don’t forget the post-production phase, which adds about $1 million for tasks like editing and sound design.
- Talent Expenses
Attracting viewers often means hiring big-name celebrities.
In fact, roughly 70% of commercials since 2020 have featured famous faces.
While casting an unknown may cost around $250,000, recognizable stars command fees starting at $1 million, with estimates ranging from $3.5 million to $5 million for even more prominent figures.
This year, many ads showcase multiple celebs, further escalating these costs.
- Music Licensing
A catchy soundtrack can make or break an advertisement.
Brands frequently opt for popular songs to boost their ads’ appeal, with licensing fees soaring between $1 million and $3 million.
For instance, Budweiser has drawn upon timeless classics, while Mountain Dew gave a fresh twist to Seal’s “Kiss From a Rose” in their own jingle.
When we tally the cost for a typical 30-second commercial, we see an average of $4.5 million for agency fees, $3.5 million for production, $1 million for post-production, around $8 million for celebrity talent, and another $2 million for music licensing.
This brings us to a hefty total of about $27 million for just one ad spot.
Additional Costs to Keep in Mind
Brands usually set aside extra budgets for digital and social media outreach, which can increase expenses by an additional $3 million to $10 million.
Plus, the Fox network requires that companies purchasing an $8 million ad also commit to another $8 million in media spending throughout the year.
This effectively doubles the initial investment to a staggering $16 million.
When you add an estimated $5 million for broader advertising campaigns and the extra $8 million mandated by Fox, the total expenditure for a Super Bowl ad can climb to roughly $40 million.
What does all this financial commitment entail? Is such an investment justified? Insights from sources close to Dunkin’ reveal that they enjoyed record sales of donuts the day after last year’s Super Bowl.
On another note, a low-key Coinbase advertisement drove so much traffic that their app crashed under the weight of downloads.
As we look ahead, Americans are expected to wager around $1.39 billion on legal betting related to the Super Bowl.
However, it’s vital to recognize the risks companies face; for businesses pouring millions into their ads, this high-stakes competition is not to be taken lightly.
Source: Fastcompany