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Selling advertising for an annual TV extravaganza that draws 80 million-plus viewers might seem like easy labor. But when the final seconds tick off the clock on Feb. 3 in New Orleans to end Super Bowl XXXVI and the Most Valuable Player declares he's headed for Disney World, more than a few weary Fox Sports salespeople will likely wish they were heading for a vacation, too.
That's because they have had to work overtime to woo reluctant advertisers in one of the driest ad climates ever. The Super Bowl is usually the biggest ad day of the year, but not this time. For some marketers, the recession has eroded ad budgets. For others, the Winter Olympics Games, kicking off on NBC less than a week later, have more allure. Demand is so tepid this year that the average rate for a 30-second spot has dropped for the first time, by 9%, to $2 million, after doubling since 1996. Fox is even throwing in some extra goodies, such as additional on-air mentions and sponsorships. Two weeks prior to the game, Fox had about 10% of ad time for the game itself left to sell but was still hoping to reach $120 million in revenues.
Of course, this was one of the worst ad years in a decade. Total ad spending, according to media-buying firm Universal McCann, plummeted 4% last year and is expected to post a meager gain of 2.4% this year, mostly on heavier buying in the third and fourth quarters. Then again, no year could beat 2000, when 17 dot-coms bought Super Bowl ads on ABC, a few paying as much as $3 million for 30 seconds. A year later, only three dot-coms returned. "The game is still trying to recover from the tech bubble bursting," says Mel Berning, president of U.S. broadcasting for media buyer MediaVest. Many advertisers are waiting until the last minute to get the best price. "No one is rushing to get there first this year," says Carolyn Bivens, president of media buying firm Initiative Media North America.
Even though rates are down this year, price inflation over the past five years has some advertisers wondering whether the Super Bowl is their best buy, especially when the premium they pay for that one Sunday game over a regular prime time show is 75%, vs. 15% just a decade ago. "For the vast majority of advertisers, that's just not the way brands are built anymore," says Don Pettit, president and CEO of brand consultant Sterling Group. "To concentrate that amount of money in one event" forecloses other campaigns.
Another anomaly: The terrorist attacks on September 11 delayed the National Football League season by a week. That pushed the Super Bowl back to Feb. 3, closing the gap between the game and the start of the Olympics in Salt Lake City on Feb. 8. EDS, Volkswagen, and Nike, unwilling to fork over for both events, opted for the Olympics. Allstate Insurance Co., too, made a major Olympics commitment, buying more than 50 spots aimed at viewers who may not be football fans. "The Olympics get you an association with the premier event not just in sports but in entertainment," says Robert S. Apatoff, Allstate's senior vice-president and chief marketing officer.
It's also a more attractive buy for advertisers looking to target women, a big audience for the skating events that will air for 10 nights during the 17 days of coverage. Randy Falco, chief operating officer for NBC's Olympics unit, says most advertisers are buying ads in packages across the network and its cable channels MSNBC and CNBC, which will also broadcast some events. "Advertisers get more bang for the buck," says Falco. Two weeks before the Games, NBC had sold about 97% of its Olympic ad inventory, at an average $600,000 per 30-second spot--already closing in on its goal of $720 million in revenues for Salt Lake City, Falco says.
Still, some of the old Super Bowl reliables are back, such as Anheuser-Busch, PepsiCo, and General Motors. Universal theme parks, taking aim at rival Walt Disney Co., is buying its first Super Bowl ad ever, a 60-second spot in the third quarter costing $3 million. Some such as Visa are so flush they're spending on both networks. "It's wonderful, as a leading brand, not to have to make decisions among these," says Nancy Friedman, Visa's vice-president for advertising. But for other recession-battered marketers that have to choose, the Super Bowl isn't the must-buy event it once was. By Tom Lowry, with Gerry Khermouch in New York and Ronald Grover in Los Angeles