• Why the Perfect Storm for Super Bowl Ads Will Continue

    Back in February, 2006, I wrote a newsletter titled, "The $10 Million Super Bowl Ad?" In it, I suggested that sometime in the future, a Super Bowl ad could cost $10 million, up from the $2.5 million they were then selling for. My rationale was that subsequent online video viewing opportunities would drive not just exposure, but also new creative opportunities to engage the audience, translating to more advertiser value.  

    As it has turned out, the value of Super Bowl ads has indeed continued to march higher, with this year's spots going for $4 million. And no question, the subsequent online video views that Super Bowl ads receive reduce the net CPM that advertisers are in effect paying. But what I didn't anticipate were 3 key trends that have made Super Bowl ads even more valuable - and will continue to do so: the accelerating fragmentation of TV audiences, an emerging pre-game release/teaser strategy for the ads and the escalating media coverage Super Bowl ads themselves now receive.

    Audience fragmentation was already happening in 2006, but what has occurred since was impossible to predict - the massive adoption of online video viewing that has made attracting eyeballs to one place at one time harder than ever. Consider that back in October, 2006, when Google acquired YouTube, it bragged that it had 100 million video views/day and 65K videos uploaded/day. These days YouTube has 100 hours of video uploaded every minute, and over 1 billion unique users/month. Separate, Netflix has gone from zero people streaming its content to over 44 million globally. Audiences are splintered everywhere today and across myriad devices.

    All of this fragmentation of course means that the value of any TV opportunity that brings together big, live audiences is worth more than ever. But whereas in the past, when Super Bowl ads enjoyed a big "reveal" during the game, this year we saw an accelerating trend toward advertisers releasing their full ads or teasers before the game. YouTube said last week that these had been viewed more than 44 million times, over 2x the level of 2013. One of the ads pre-released, Budweiser's "Puppy Love," has already gained over 37 million views on YouTube alone. In addition, the promotion of ads gained steam, with brands like Jaguar going so far as to wrap subways in NYC promoting their ad.

    Last but not least, Super Bowl ads are now being covered and showcased in the media like never before, driving awareness, buzz and all-important social sharing. It's not just the showcases like YouTube Ad Blitz, Hulu's AdZone or USA Today's Super Bowl Ad Meter. Rather, media outlets now look for interesting angles or plot twists to cover the ads. For example, this year NPR devoted an entire segment to Intuit's contest to give one small business a free ad during the game (girls' toymaker GoldieBlox won). And SodaStream got plenty of extra attention when Scarlett Johansson quit as an Oxfam ambassador due to concerns about its plant in a West Bank settlement. One can imagine backstory items about Super Bowl ads becoming as common as Olympic athlete profiles in the future.

    While all of these factors are building the value of Super Bowl ads, what doesn't seem to have yet contributed meaningfully is the idea of using the ads as a springboard to an ongoing online narrative or true engagement, as I suggested back in 2006. No doubt Seinfeld's surprise halftime appearance will boost viewership for his "Comedians in Cars" series on Crackle and Esurance's contest for tweets will drive activity. But for the most part the ads were surprisingly light on follow-up engagement. We're still waiting for advertisers to capitalize on this important benefit.

    No matter - between the fragmenting of audiences, the pre-release strategies and the media coverage, Super Bowl ad prices are sure to climb in the future. In fact at some point, $10 million may even seem like a bargain.