SBJ/20090126/Super Bowl XLIII

NBC stands firm on $3M ad rate

NBC is holding the line on its $3 million Super Bowl ad rate despite a recession that has thrown the TV advertising market into a state of “outright paralysis,” said NBC’s top ad sales executive.

Fox charged $2.7 million for a 30-second
advertising spot during last year’s Super Bowl.
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“We’re not going to significantly break price,” said Seth Winter, NBC’s senior vice president for ad sales. “I feel strongly that when you’ve done business with 20 of your best partners … [you don’t want to] compromise what you’ve done. That doesn’t make sense on any number of levels.”

While $3 million is the cost of doing business, Winter said there are several opportunities for potential advertisers to get a Super Bowl spot for less, particularly if advertisers buy in other NBC Sports programming.

“While we’ve been asking for $3 million, we’ve been asking as loudly, if not louder, for peripheral investment to give me a reason to write it for less than $3 million,” Winter said.

Former Anheuser-Busch sports marketing and media chief Tony Ponturo said Winter will have to get creative to cut the last couple of deals.

“Seth and NBC got out of the gates quick with strong unit pricing and fast sales but ultimately hit the ‘dreaded’ last-eight-to-10-units-left wall in the fourth quarter [of 2008] and now a tough economy,” Ponturo said. “I know Seth wants to maintain the integrity of the pricing, so creativity and some packaging with other inventory may be in order.”

SNAPSHOT: CONSUMER SPENDING
Last years Super Bowl had U.S. consumers spending an estimated $9.5 billion as a direct result of the game, with many of those purchases coming at the grocery store.
Item Pct. of viewers buying the item specifically because of the game
Food/beverages 67.40%
Team-specific apparel or accessories 6.00%
TV 4.10%
Furniture 1.90%
Note: Information based on more than 8,000 U.S. adults (ages 18+) being asked a series of questions in early January about their Super Bowl plans.
Source: National Retail Federation annual survey, conducted by BIGresearch
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The best category so far, Winter said, has been movie companies. “Without them, I don’t know where we’d be,” he said.

The worst? Domestic autos, which for the first time in memory, had not purchased any time during or around the game as of mid-January.

“There are certain advertisers that you’d expect year in and year out,” Winter said. “We’re selling in a marketplace where there are categories and advertisers who are just not there to support the game. It’s startling, but we continue to move ahead.”

Getting good results is important to Winter, who took a big risk earlier this spring when he set the price of a Super Bowl ad at its highest-ever level.

The increase was unprecedented, especially considering that for the past several years, TV ad rates for 30-second Super Bowl spots generally have risen by $100,000 per year. Last year, Fox wrote business for $2.7 million. Most observers expected NBC to charge $2.8 million this year.

Predictably, the ad sales community complained loudly when NBC set its price, but the network saw a lot of early success with its new, aggressive rate. In September, coming off a wildly successful Olympics — which brought in more than $1 billion in advertising — NBC said it had sold 85 percent of its Super Bowl inventory, leaving just 10 spots available.

John Elway led the Broncos
to a win in the last Super
Bowl broadcast by NBC.
BROADCAST LEADERBOARD
NBC will broadcast the Super Bowl for the 16th time in the games history this year, but it marks the first Super Bowl broadcast for the nextwork since 1998.
Network
No. of Super Bowls
CBS
16
NBC
15
ABC
7
Fox
5
Note: Includes the shared broadcast of Super Bowl I.
Source: SportsBusiness Journal archives

Then the economy tanked. Winter describes the fourth quarter as a period of “outright paralysis in the marketplace with certain companies.”

Earlier this month, NBC said it was 90 percent sold, with seven spots left. That means the network had filled just three spots since September, and it was planning a big push to sell the remaining spots in the final weeks before the big game.

“We left for Beijing with a solid foundation, thinking that we would come back post-Labor Day and we’d continue to march to this inevitable sellout,” Winter said. “Obviously, the world changed in September pretty dramatically. The road to sellout has been littered more greatly than we thought it would be. We continue to move ahead, but it’s not with the same ease prior to leaving for Beijing.”

Winter defended his decision to push the $3 million price point.

“If advertisers are spending hundreds of millions of dollars, why would you let $100,000 get in the way of the most important day of their advertising calendar?”

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