Fox bids to push Super Bowl ad prices past $5 million
Fox wants to kick the cost of Super Bowl advertising over a new line.
Fox Sports is seeking more than $5 million for a 30-second commercial in its 2017 broadcast of Super Bowl LI, according to people familiar with the situation, a level that would raise the price tag for ad inventory in what is usually the nation's most-watched annual TV event into the stratosphere. Other networks may have secured $5 million for a few commercials in the gridiron classic, but if Fox has its way, each ad in the game will fetch the princely sum – and possibly more.
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The effort does not come without risk. In 2014, NBC made a bid to sell Super Bowl commercials at $4.5 million a pop, a 12.5% hike from what Fox had sought in the year prior, and worked until just a few days before its 2015 broadcast of Super Bowl XLIX to sell out its inventory. CBS fared better in 2015 when it sought at least $4.5 million to $4.7 million for a 30-second spot (and more in some cases) for this year's Super Bowl 50, though it kept the till open in case of last-minute interest. Marketers flock to the Super Bowl to get a pitch in front of the outsize audience the event attracts, but in recent years, they have taken more time to join the ad roster, rather than rushing in full-bore.
With advertisers enjoying an abundance of choice of places to run their commercials, even the Super Bowl, it would seem, is under scrutiny.
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In early talks, Fox Sports has sought between $5 million and $5.5 million for a 30-second commercial slot, according to one of the people familiar with the pace of negotiations. Another executive suggested the 21st Century Fox-owned unit has in some cases sought $5.6 million or higher. The costs would include the ads appearing in Fox's live stream of the game, according to one of the people with knowledge of the discussions. Fox Sports has also sought to have Super Bowl clients spend a similar amount to run ads across the company's media portfolio, a tactic that is not uncommon in these kinds of talks. That means a single advertiser could end up paying $10 million or more for the chance to appear in the event.
Fox declined to make executives available for comment.
How much higher can the price go? One ad buying executive balked at the notion of a Super Bowl ad costs moving closer to $6 million per berth. "They will not be getting $5.7 million a spot," this executive said, suggesting the current price range may be meeting with resistance in negotiations. While a single price point often makes the rounds in media reports about Super Bowl commercials, the fact is not everyone pays the same figure. The cost fluctuates depending on when the ad airs in the game, how many commercials the advertiser is buying, whether or not a sponsor has a multi-year sponsorship deal in place, and other factors
The cost of advertising in the Super Bowl has always been astronomical compared to other TV properties, but the price has risen significantly in recent years. A decade ago, the cost of a 30-second spot was a mere $2.5 million, according to Kantar Media, a tracker of ad spending – cheap by today's standards. By that measure, the price of a 30-second commercial has risen 76% between 2006 and last year, Kantar said. Advertisers typically spend hundreds of thousands of dollars more on the production of their commercials, which often require special effects, celebrities, expensive licensing rights for music and social-media promotion.
The lure? The chance to get a promotional message about a new product in front of millions of consumers in a single maneuver. Denny's in 2009 and 2010 used the Super Bowl to offer free breakfast giveaways and get people to come in to its restaurants to sample the fare. Chrysler in 2011 ran a massive two-minute commercial that helped tout the notion that U.S. automakers had rebounded from a crippling recession and were ready to get back to business. As a defiant Eminem song played, the automaker boasted that its cars were "Imported from Detroit."
The Super Bowl in recent years has proven to be a game-changer in the world of TV ratings, breaking records in multiple years for the most-watched TV broadcast of all time. The honor was once held by the series finale of "M*A*S*H" on CBS, which lured 105.9 million viewers in 1983. That benchmark has been surpassed in every year this decade by the Super Bowl. After the event set new records in 2014 and 2015 with 114.4 million viewers and 112.2 million viewers, respectively, Super Bowl 50 notched an audience of 111.9 million.
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PepsiCo, Busch and Group, owner of Chrysler and Fiat, are among the marketers who become regular sponsors of the Super Bowl. Spokespersons for the brewer and the soda giant did not respond immediately to queries about their possible plans for Super Bowl LI, while a spokeswoman for said the company had "nothing to share" at present.
PepsiCo, Anheuser Busch InBev and FCA Group, owner of Chrysler and Fiat, are among the marketers who become regular sponsors of the Super Bowl. Spokespersons for the brewer and the soda giant did not respond immediately to queries about their possible plans for Super Bowl LI, while a spokeswoman for FCA said the company had "nothing to share" at present.
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