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AJC Article: Is The Cost Of A Super Bowl Commercial Really Worth It?

So, what did you think of this year’s Super Bowl commercials?

There were many good ones ranging from the Bud Light ad starring Arnold Schwarzenegger to Bob Dylan for Chrysler.

Did you know there’s a local connection to some of the most memorable Super Bowl spots of recent years? 

The 2013 Super Bowl Budweiser Clydesdales commercial and the Volkswagen “The Force” ad with the young Darth Vader were created, in part, by graduates from Atlanta’s Creative Circus, a two-year, post-graduate school that offers programs in advertising, design and photography.

Advertisers paid up to $4 million for a 30-second commercial in this year’s big game. Can that possibly make economic sense, or is it all about ego? Let’s do the math, using frequent Super Bowl advertiser GoDaddy.com. I am constantly on GoDaddy.com buying domain names for current and possible future business ventures.  For my new book “You Can Retire Sooner Than You Think,” I purchased several domains, including retiresooner.org and happiestretireeontheblock.com.

Even though a domain name on Go Daddy might cost just $12.99/year, smart customers buy every variation — .com, .org, .net .– Also, the price is only for one year, so this becomes an annual cost if you want to keep the domain name. I looked back at my Go Daddy history and found that my orders average around $100 per visit to the site.

Assume that the average customer ends up spending $100 a year. How many new customers will it take for Go Daddy to be able to generate the same amount of revenue it would take to pay for their Super Bowl ad?

Take the average commercial cost of $4 million and divide it by $100 and you discover that GoDaddy needs to bring in 40,000 customers to break even on the ad.  That might sound like a lot of customers, but it represents just 0.04 percent of the Super Bowl TV audience.  Of course, a well-done spot adds immeasurable extra value by keeping the brand top-of-mind for months to come with consumers who might later be in the market for a domain name or related services.

So, this week when a co-worker says “Can you believe that companies pay $4 million for Super Bowl commercials?”  Just smile, sip your coffee and say, “Yes.  Yes, I can.”

Certified financial planner Wes Moss offers financial and accessible investment advice to Atlanta Bargain Hunter readers. See his weekly column on AJC Bargain Hunter.

 


 

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