NBC Not Slashing Super Bowl Prices…Yet
Eight spots remain for annual advertising showcase
By Claire Atkinson -- Broadcasting & Cable, 12/7/2008 10:30:00 AM
Selling three million dollar Super Bowl spots in an economy full of disappearing categories might feel like tough sledding for the NBC sports sales team. Still demand remains strong for the most-watched TV event of the year, and there's no shortage of takers so long as they get the TV equivalent of cash-back coupon. (See who's in and who's opting out below.)
NBC made the smart move of pricing high to the tune of $3 million and booking as many deals as possible during the surprisingly strong upfront this May. But that's left lean pickings in the frozen solid first quarter scatter market and the network still has at least eight spots to sell. That is not to say that NBC is totally slashing prices. Not yet, anyway.
Sources have said NBC is negotiating around the $2.6-2.7 million mark. Other reports suggest that NBC is prepared to deal at the $2.8 million mark, still a fairly high figure given the economy.
Packaged goods, retail and pharmaceutical categories are holding up the ad market this quarter and many marketers have signaled a willingness to pick up extra spots should they become available. NBC's parent General Electric can ill-ford a poorly sold Super Bowl given its willingness to let NBC spend $600 million for a six-year NFL deal starting in 2006 and including two Super Bowl events.
"People still need to take their pills," said Aaron Cohen, chief media negotiation officer at Horizon Media, New York. "They still need to eat."
Even companies that are suffering in this market are committing to buys. ETrade, which airs ads featuring a talking baby who trades, is returning to the game despite a huge third-quarter loss.
January, however, is when the real deal making is expected to begin. A murder of marketers is sitting on the sidelines waiting to either swoop on additional spots or get in on bargain buys. When asked if $3 million is too much to pay for a thirty second spot in the current down economy, ad buyer Cohen responded, "Hell, yes!" He said if he had clients interested in buying spots, he'd be waiting until the very last minute. If there's anything left over, you can bet NBC will be offering the leftovers to corporate family such as General Electric or its sister studio as ABC did when it aired the Super Bowl back in 2006.
Cohen added however that NBC was right to hold out given its investment in both the rights fees and the production costs associated with the event. "It is perfectly legitimate to ask as much as they can. It is still the premiere event of the year. They just got sideswiped by the economy and everybody is running for the buzzsaw," he added.
One company which may purchase additional spots is GoDaddy.com. CEO Bob Parsons told B&C, "We may purchase another down the road if there's a spot available." GoDaddy.com is filming two spots featuring race car driver, Danica Patrick. Coca-Cola too, has been known to purchase spots last minute. The beverage brand ran two spots for Coke and one for Vitamin Water last year.
Halftime sponsorship was sold early on to Bridgestone Firestone North America as part of a two year deal with the NFL, which owns that ad inventory. The company will run two thirty second spots in the game. When asked about whether the company would have bought spots had it not been a sponsor a spokesman said: "I believe we are spending less overall in advertising next year, but the one thing we've been told by our dealers is our sports sponsorships are working and they want us to continue to do that and invest in that."
For certain marketers, who build promotions and events around their spots, getting in early, even at the $3 million level, is a must. Pepsi Cola Co. falls into the former category, though as a longtime major advertiser it pays less than the $3 million per spot.
A spokesman for Pepsi said: "We almost can't afford not to advertise on the Super Bowl. When you consider the millions of people who watch the Super Bowl and all of the discussion that goes on about the commercials, the value is actually quite good. The main reasons are the 'water cooler' buzz: people talking about the spots the next day and media coverage. There is heavy media interest about the commercials both before and after the game, and the news coverage alone can be worth millions of dollars."
Anheuser-Busch, which has advertised in the Super Bowl since 1989 and has just been acquired by European brewer InBev, remains firmly committed to the event. Executive Vice President and Chief Creative Officer Bob Lachky described the Super Bowl as a "beer holiday" that rivals the July 4th summer sales spike.
While Mr. Lachky declined to discuss the precise return on investment of his marketing dollar, he said the company had gained massive market share over the course of its association with the big game.
"We have the two biggest selling beer brands in the world and a dominant position as an advertiser and Super Bowl is the penultimate platform. It is a very efficient buy."
The company is choosing to focus on its iconic Clydesdale horses, which have featured in past advertising. The ads feature immigrant horses trying out new jobs.
"It is very reassuring to see a beloved symbol in a tumultuous time," he said of the Clydesdales. "I think it's fair to play that angle. Super Bowl is a holiday that is timeless, where everyone is going to be together. People will be having a beer, forgetting about their troubles, that holds a little more significance this year."
With David Goetzl and Alex Weprin
Bridgestone Firestone (Half Time sponsorship)
Mars' Pedigree dog food
Viacom's Paramount Pictures
Procter & Gamble
Last year's list
Sobe Life Water
Tide to Go
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