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Tuesday, January 29, 2013

Super Bowl Ad Buys Break Records, Create Controversy

Super Bowl ad spending is breaking records this year, with advertisers shelling out an average of $3.7 million per 30-second spot. Some companies are paying as much $4 million.

And while the championship between the Baltimore Ravens and the San Francisco 49ers is still five days away, some ads are already making the rounds online, and in some cases, causing controversy.

Volkswagen Ad: “Black Face With  Voices”

Volkswagen’s new commercial features a white Midwestern guy, speaking with a fake Jamaican accent, presumably to emphasize his carefree attitude towards life.

New York Times columnist Charles Blow, appearing on CNN, called the ad “black face with voices.” Others thought it was a good-natured jab at Midwestern sensibilities.

Either way, the ad may be doing its job: gaining attention.

Paul Sweeney, senior media analyst at Bloomberg Industries, says the Super Bowl is a huge platform with 111 million viewers expected this year. While advertisers are spending millions to produce and air the spots, they’re more interested in creating buzz than directly increasing sales.

Buzz More Valuable Than Sales

Research shows that sales don’t always spike right after the Super Bowl. But these days companies are counting on the spots to generate buzz online, to introduce new products or to show investors that they’re willing to invest in their brand.

Forbes reported on a study from the Unviersity of Colorado at Boulder that found the stock price of companies rose shortly after the media began to hype the ads’ upcoming appearance. Even if the ad tanked, the stock climbed.

But Sweeney said it doesn’t always work that way, especially for smaller companies who sink their entire advertising budgets into one Super Bowl ad.

“The stock is actually traded down, because people are concerned that they’re not allocating their advertising budget appropriately,” Sweeney said.

Big Night For CBS

Even CBS isn’t guaranteed a direct cash infusion from the Super Bowl.

Sweeney says networks are lucky to break even on the Super Bowl, since the cost of buying the rights has risen so dramatically in recent years.

Instead, CBS is banking on the promotional value of the game.

“They love the Super Bowl because it is a great promotional platform. You’re going to see a lot of promotions for CBS programming during the Super Bowl,” Sweeney said.

Guest:

  • Paul Sweeney, senior media analyst at Bloomberg Industries.

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