The showdown between the Atlanta Falcons and the New England Patriots at Super Bowl 51 is barely a week away, which means that the marketing and advertising world is about to engage in their annual ultimate battle: Super Bowl ads. For almost as long as teams have competed for the Vince Lombardi Trophy, Super Bowl ads have been the place for brands to showcase the most interesting, tear-raising, gut-busting, and creative ads that their creative departments can come up with.

The rationale is this: the Super Bowl is one of the most viewed TV events every year globally – an estimated 167 million people viewed Super Bowl 50 in 2016 – so there’s no better place to advertise. Your ad should be big and memorable, aiming to be the ad that gets discussed and shared the next day over the water cooler.

Rising Costs of Super Bowl Ad Spend: Why 2017 is Not Like 1984

However, with high visibility comes an expensive price tag. In 1967, 30 seconds of ad time cost $47,000, or $301,000 today. Over time, the sales tag for those 30 second spots grew until 1995 when the price finally went to more than $1 million. The 2017 Super Bowl broadcast marks the biggest price for 30 seconds of ad time in Super Bowl history at $5 million.

The question for many brands who advertise during the Super Bowl is this: is it worth it? Remember that the $5 million is only for the 30 seconds of time on the air – that doesn’t include production costs, writing, shooting, famous actors’ salaries, or many of the other costs that come along with producing an ad worthy of getting remembered the next day at work.

On top of the cost, it can be risky for brand to jump into that pool every year. Due to the competition to stand out amongst the best creative that money can buy, brands try wilder and more outrageous ads each year. The combination of these outlandish ads with one of the largest audiences in the world can be volatile. If a joke or visual lands offensively, suddenly you’ve got a PR nightmare on your hands.

Adding together the cost, competition, potential for bad press, plus the much more cost efficient nature of a social media presence, and the studies that say only 20% of Super Bowl ads actually increase sales, that’s enough for many marketers to throw in the towel on advertising during the Super Bowl.

You’re Not You When You’re Not Advertising During the Super Bowl

That being said, consider Pepsi’s cautionary tale: in 2010 Pepsi decided to go in a different direction from its competitors. They canceled their Super Bowl advertising spot and instead turned their traditional funds into one of the largest scale social media campaigns ever created. Called the “Pepsi Refresh Project,” the initiative was a completely online project that awarded grants to individuals or groups with ideas for positive improvements on communities, states, or for the nation.

Along with the money that Pepsi was putting forth in grants, they invested millions in online engagement: a full website, blog, Facebook, Twitter, and Youtube efforts were put forth. It was an enormous online endeavor that did not engage with traditional Super Bowl advertising or any traditional media.
The results were not ideal. The “Pepsi Refresh Project” garnered a massive online following and huge social engagement, however it did not actually sell Pepsi products. In fact, Pepsi and Diet Pepsi each lost 5% market share that year, dropping Pepsi to the #3 soft drink spot behind Diet Coke for the first time in their history. This resulted in an estimated loss of $350 million for Pepsi-Cola. In 2011, Pepsi returned to advertising during the Super Bowl.

The moral of the story? Traditional media isn’t dead yet, and don’t doubt the power of the Super Bowl.

Wassup? with Super Bowl Ads Usefulness to the Brand

So if the ads don’t boost sales, what is the benefit to the company? You could say, based on the Pepsi example, that if you’re a large enough brand that it keeps you in the game. However, studies have shown that the ads that really stick out generate brand favorability. Those companies and products become associated with humor, emotion, and social gatherings. This is also why a large portion of Super Bowl ads are food and drink brands.

Additionally, a Super Bowl ad is also a chance for the brand to add itself to pop culture, good or bad. Coke with Mean Joe Green “Hey kid, catch!”, Apple with “1984,” Budweiser with “Frogs,” and even GoDaddy with their provocatively dressed women: all of these ads have become cultural touchstones due to their popularity, and you cannot separate the brand from these ads. “There’s no such thing as bad press” applies greatly in this situation, as GoDaddy’s ads are on both best and worst Super Bowl ad lists.

The Brand Your Brand Could Advertise Like

If you aren’t a major national brand, or even a large brand that doesn’t normally advertise during the Super Bowl, how would airing a Super Bowl ad affect you? Let’s look at the interesting case of Loctite Glue.

Loctite is one of the top three glue brands in the US, and took a large gamble in 2015 by snagging a Super Bowl ad placement for the first time in its history. They used the lion’s share of their annual advertising budget on this one Super Bowl commercial. The ad agency Fallon collaborated with directors Tim & Eric to create a bizarrely mesmerizing commercial for their “Win at Glue” campaign called “Positive Feelings.”

The ad was a runaway success, at least from an advertising perspective. It was featured as AdWeek’s Ad of the Day, AdWeek’s Top Five Spots of the Super Bowl, and others called it the best of 2015. But did that translate into sales? Mostly.

Loctite’s Super Bowl ad did increase their sales for the next 2 weeks by nearly 9%, but the entire glue category also reported increased sales of 6.5% overall. Over the following year, Loctite saw a 6.7% increase, but Gorilla Glue also saw an overall bump of 36% and Elmer’s Glue doubled its growth rate from the previous year.

The marketing director of Loctite stated after the fact that their Super Bowl ad “put us on the map” and their brand awareness increased by 5 points, but “doing it again would probably feel limiting.” Basically, Super Bowl advertising is an event by itself and participating in that event can have effects on your business that can’t be predicted: in fact, it can ripple effect through your industry.

Hey Kid! Catch a Super Bowl Budget

While Loctite’s Super Bowl ad strategy is a complex one, an even more interesting idea is what other businesses could do with that money. Say that a midsize brand or even a small, local business were suddenly given $5 million – would it be prudent to get a Super Bowl ad spot? It mostly likely wouldn’t be cost effective to spend that much money on a Super Bowl ad, plus the extra for production costs. However, what if the midsize or small business used that $5 million on their own digital marketing instead?

The results are rather interesting. Taking the time to price out every digital marketing service that you could use (or those that would make sense for such a client) since you have a “dream marketing budget,” and attempting to spend as much of that $5 million on marketing for a small business would look something like this:

Small, Local Business with $1,000,000 Annual Revenue

Full Website Redesign – $100,000

If you suddenly had a dream digital marketing budget, the first place you would probably want to look for changes is your site. This will be your focal point for all of your digital marketing efforts so your customers will have the best experience possible when they land on your site. Unless you had recently had it redone (and even then, if you didn’t like how the redesign went) you want to make certain that you have the most beautiful, intuitive, well-designed site that money can buy. Whether you want to completely redo all of your content or start selling products through your site, you are only limited by what you can dream up.

New Professional Photos – $10,000

Along with the new website, you want to make sure that your company looks great too. New professional commercial photos for your site and company personnel photographs would be a must.

Hire a Full Service Digital Marketing Company – $100,000

This retainer fee for your digital marketing company would ensure that you have the company’s attention and a large chunk of their time each month. The funds that you spend here would contribute to ensuring that the website you built also dominates search engine results for your keywords in your area. Content creation, landing pages, search engine optimization, link building, social media management, paid search management – this retainer would ensure that your site, your social media platforms, and any online engagement with your site and your brand is professional, courteous, and consistent.

Video Production – $50,000

To further ensure that your business’s online presence has 360 degree thinking, retaining the services of a video production company to create and produce online video content for you is key. The power of Youtube and brand engagement/favorability are becoming more intertwined, and with your marketing company interacting with your video production team, this will ensure consistency across your platforms and touchpoints.

Google AdWords Annual Spend – $365,000

Spending $1,000 per day on AdWords’ paid search platform will continue to provide lead generation and sales. This account would be managed through your marketing company’s specialists, and would generate more traffic to your site than just SEO work.

Facebook Ads – $182,000

With the ability to target very specific demographics and customers, $500 per day on Facebook ads would ensure that no matter where your potential customers look for something even remotely related to your services, your business will be represented.
Events (Corporate Sponsorship, Galas, etc.) – $300,000

A part of growing your brand means throwing a few parties – you want to show that your business is an active and contributing part of the community. This means that you need to be throwing charity events, fun runs, pumpkin carving contests, and actively participating with local children sports teams. You can throw fancy, black tie affairs with shrimp and champagne to raise money for a cause you believe in.

On top of the cost of locations, food, amenities, and so forth, you’ll need event planners and others to manage the events. Your marketing company can live stream events, advertise for the cause, post to social media about it – all of these efforts contribute to your online reputation.

Local Business “Dream Marketing Budget” Total Spend: $1,107,500

We really tried to fully spend that $5 million on a local business and came up short by $3,982,500. To be fair, unless that local business is planning or ready to expand a great deal very quickly, all of these marketing efforts are overkill.

Would a midsize business better utilize that $5 million marketing budget? Here’s an estimate:

Midsize Business with $50,000,000 Annual Revenue

Full Website Redesign – $200,000 | New Professional Photos – $50,000

Again, you want to put your best foot forward with your online persona, and that begins with the quality of your website and your marketing materials. With a larger scale, more people, and a bigger infrastructure, that means more of everything.

Hire an In-House Marketing Department – $970,000

At this level, having the full attention of your own marketing staff is key. Rather than having the partial attention of a separate marketing company that would have other clients to worry about, your own department would solely focus on the success and ranking of the site. You would need:

  • Chief Marketing Officer/Executive Creative Director – $150,000
  • 2 Directors/Head of Sub-Departments – $100,000 each
  • 2 Paid Search Specialists – $80,000 each
  • 2 Content Specialists/Copy Writers – $80,000 each
  • 2 Graphic Designers/Art Directors – $80,000 each
  • Social Media Specialist – $60,000
  • PR Specialist – $80,000

New Marketing Materials – $500,000

This is dependent upon your business and its structure, but with the redesign of the site and in-house marketing team, a rebrand might be in order. This mean you’ll need to replace uniforms, signage, trucks, and whatever other marketing materials are needed.

Video Production – $50,000

At this point in your growth, it would be premature to hire an in-house video production team. A retainer for video services to integrate with your in-house team will work well.

Influencer Marketing Budget – $300,000

Your company is at a point where getting mentions on prominent social media accounts, videos, or blog posts can be crucial to the success of your product or service. Allotting funds toward obtaining the influence of those prominent placements is a smart move.

Google AdWords Annual Spend – $730,000

A robust daily budget for AdWords helps ensure that your business ranks well nationally for every term that you want. With in-house specialists looking after the accounts, AdWords will provide more conversions than you could want.

Facebook Ads – $365,000

With the extreme targeting that Facebook Ads provide and with the specialized lifting power of your in-house paid search marketers, you’ll be able to craft targeted ad campaigns honed for specific markets and demographics.

Events (Corporate Sponsorship, Galas, etc.) – $750,000

With all of the hard work your marketing, development, and production teams have put in, it’s expected that your company will participate in many sponsorships, galas, charity fundraisers, and community initiatives across several areas and states.

Midsize Business “Dream Marketing Budget” Total Spend: $3,415,000

Again we find that spending a Super Bowl ad spot budget is actually pretty hard to do, unless your brand is large enough that they often do advertise during the Super Bowl. This is a similar situation to the small, local business – unless the goal of your business is to expand greatly and quickly, this amount of ad spend on your digital marketing budget is unnecessary.

Where’s the Beef?

The moral of the story here is that for a small or midsize business, your most cost effective move isn’t to go with large, flashy traditional media ad spots – they aren’t going to provide the kind of ROI that you would hope. Dedicated, professional, consistent brand identity across all of your customer-facing online platforms with back end optimizing for optimal rankings is where you should be placing your budget – it will get your business farther for a longer period of time.

As for the huge brands that routinely advertise in the Super Bowl? Leave them to duke it out amongst themselves. With their annual revenue, it puts them in a league all by themselves. Take PepsiCo for example: they are the brand that owns Pepsi and routinely advertise in the Super Bowl. Their annual revenue for 2016 was over $16 billion.

While $5 million for ad time in the Super Bowl might sound like a lot of money even for a company that posts billions in revenue, what’s the relative value of that $5 million for our small and midsize business? Interestingly, if we use PepsiCo’s $16 billion revenue as our baseline, $5 million represents only .03125% of that total.

For a midsize business with $50 million in annual revenue, the relative amount is $15,625.

For a small, local business with $1 million in annual revenue, the relative amount is only $312.50.