For at least a few hours on Feb. 4, everything will be peachy in ad land. A nationwide audience, more than 100 million strong, will gather round their televisions and pay rapt attention to commercials that cost roughly $5 million a (30-second) pop.
The occasion, of course, is the Super Bowl. Long a triumph of modern marketing—an annual ritual in which the ads are as big a deal as the athletics—Super Bowl LII looks to be especially so. Despite cord cutters and ad-skipping DVRs, flagging NFL ratings, and the ever-shrinking American attention span, big brands (Budweiser and Coca-Cola) and even some no-names (Avocados From Mexico) are still eager to pony up a huge chunk of their marketing budgets for a spot during the big game. (A decade ago, the cost for this was just $2.7 million). “It’s such a predictable, high-quality event,” explains Manish Bhatia, CEO of Kantar Media North America.
Last year’s broadcaster, Fox, fetched $534 million in advertising revenues from the one-day bonanza. This year’s, NBCUniversal, also has rights to the 2018 Winter Olympics, and expects to rake in more than $1 billion between the two sporting events.
That will be a boon to the network in 2018. But after the glamour of the gridiron has faded, and the fans have moved on, the TV ad industry will still be slowly and surely headed for a reckoning.
Traditional television, long the most reliable and wide-reaching of media, is losing ground (and lots of young viewers) to ad-free streaming services and other digital alternatives. The ranks of cord cutters reached 22.2 million in 2017, a 33.2% increase from the year before, according to eMarketer. Netflix (NFLX) now has more U.S. Subscribers than cable. And while Americans over the age of 65 still watch roughly 50 hours of traditional TV per week, 18- to 24-year-olds tune in for less than 13 hours—44% less time than five years ago, according to an analysis of Nielsen data by MarketingCharts.com. Ratings for must-watch live events like the Oscars and pro sports, the last bastion for ambitious TV advertisers, have also started to slip. Even the Super Bowl, TV’s most reliable event, may not be immune: Viewership declined slightly in 2016 and 2017.
However, not every marketer is sold on the superiority of online ads. While they dominated the marketplace in 2017, they’ve also come under considerable scrutiny for brand-safety concerns (ads running alongside unsavory content like ISIS videos) and charges of fraud (ads being viewed solely by bots, for example). Facebook (FB), which admitted to overstating the reach of ads on its platform in 2016, was freshly accused of doing the same thing in 2017. “We keep feeding the beast by pouring incredible sums of money into this unproductive, unmanageable abyss,” Bob Liodice, CEO of the Association of National Advertisers, told an audience at the group’s annual conference last October. Some heavy hitters agree: Procter & Gamble (PG), the world’s largest advertiser, cut its online ad buy by more than $100 million last year while reportedly upping its buy for TV at the 2017 Upfronts.
Digital’s biggest advantages—precise targeting and the seeming ease of measurement—may be under assault from TV now too. There are industry efforts underway to develop audience-targeting as well as attribution tools that better demonstrate TV ad effectiveness. In theory the latter could trace video ad exposure to consumer purchases or other shows of interest. The television industry is hoping that, once it catches up, the data will make its case.
But for the foreseeable future, the question for many companies won’t be which media, but how much of each. Big-game commercials, for example, are usually part of larger campaigns that garner plenty of online attention on Facebook, YouTube, and more. The only thing sure to reach more viewers than a Super Bowl ad, after all, is a Super Bowl ad that goes viral.
A version of this article appears in the Feb. 1, 2018 issue of Coins2Day.
