Last of a three-part series. Part One explored the NFL business issues. Part Two looked at NFL and Super Bowl marketing. Part Three reviews specifics of Super Bowl XL the week before the Big Game in Detroit. Rick Horrow, in conjunction with promotional partner Northern Trust, looks at all three parts of the NFL.
Super Bowl XL is expected to be viewed by over 130 million viewers domestically, and by nearly one billion people around the globe. Ads are going for $2.6 million per 30-second spot – a 5,000 percent increase since 1967. A record $330 million is being spent on corporate hospitality surrounding the game – despite criticisms that the third “cold weather site” in 40 years leaves visitors with little to do. The November 5, 1996 commitment of $225 million of public money that completed the financing of Ford Field created a Super Bowl commitment that will bring over $300 million of economic impact to the region by the end of next week. As we get ready for the Big Game, four major issues dominate the business headlines: (1) Corporate America and Super Bowl ads; (2) globalization of the Super Bowl; (3) image issues – Motown vs. the Rolling Stones; and (4) the hoopla in Detroit.
1. CORPORATE AMERICA AND SUPER BOWL ADS
When NBC and CBS jointly televised Super Bowl I between Green Bay and Kansas City in 1967, ads were sold for $42,500 per 30-second spot. Ads for Super Bowl X in 1976 (Pittsburgh 21, Dallas 17) sold for $125,000. Super Bowl XX in 1986 cost $550,000 per 30-second spot (Chicago 46, New England 10). Super Bowl XXX in 1996 cost $1.2 million for 30-second spot on NBC (Dallas 27, Pittsburgh 17). This year, the $2.6 million 30-second spots are clearly a record.
There is also more inventory. The NFL Network will carry 60 hours of live pre-game coverage, up from 29 hours last year. Also, more than half the ads running during the game will be shown in HD.
Why are corporations spending these astronomical rates for “30 seconds of glory?” Premium ad buys transcend the clutter, and corporations get more bang for the buck with the high-priced visibility. A study of 53 companies by University of Missouri-Kansas City revealed that companies signing with the NFL (among other sports) gained an average of $257 million in stock value and $13.6 billion in total economic value in the first trading week after announcing sponsorship deals with the NFL.
Small companies are especially careful with their ad budgets, but some take a flier on making a splash with a high priced Super Bowl ad. Take CareerBuilder, for example. The online job search company broke through last year with a quirky campaign featuring monkeys as office workers. The company saw a 50 percent increase in unique visitors and job searches on the Monday and Tuesday following last year’s game, and experienced about a 75 percent growth in revenue through the year. Other small companies are following suit. Emerald Nuts, the snack food brand of Diamonds Food, Inc., is returning to the Super Bowl, along with men’s deodorant Degree with a 30-second spot as well. Startup home disinfectant company American Home Health will kick off a $30 million marketing campaign with a 30-second spot featuring its industrial grade cleaning product under the “PS” brand.
The big companies are obviously spending as well. Anheuser-Busch paid $230 million for Super Bowl spots from 1986 through last year, 28 percent more than the next largest spender (PepsiCo, at $180 million). Burger King is planning an elaborate 60-second ad starring 92 “glamorous Whopperettes, dressed as burgers, pickles, lettuce, and tomatoes.” Gillette is buying their ads as part of a $200 million launch of its new six-bladed Fusion shaving system. Their last ad in 2004 featured Muhammad Ali and David Beckham, with Gillette sparing no expense to maximize their star power.
Corporations are spending a great deal of money this year with the Rose Bowl, Super Bowl, Olympic trilogy through February. With the Rose Bowl as the highest rated BCS game ever, combined with the traditional 40+ rating for the Super Bowl, and ending with the 200 million viewers for the Winter Olympics in Torino, advertisers are getting out their wallets as never before. Over $2 billion was spent by Corporate America on pro football advertising this year. Not surprisingly, Super Bowl Sunday is expected to generate upwards of $150 million for ABC and ESPN when including all related programming.
2. GLOBALIZATION OF THE SUPER BOWL
Internationally, the game will be telecast to over 230 countries. At least 400 of the 3,000 credentialed media are international journalists. The international viewing audience is expected to exceed 800 million, and is trending upward every year.
The NFL continues to focus on the international development as a long-term part of its growth strategy. The October 2 San Francisco 49ers-Arizona Cardinals game produced a record attendance of 103,467. Over 20 million Mexicans (a little less than one in five citizens) are fans of the NFL. The problem: tickets cost between $23 and $80 – cheaper than seats at most American stadiums, but prohibitively expensive for most Mexicans where the minimum wage is $4 per day. Undaunted, Commissioner Tagliabue announced his goal is to play a regular season game outside the U.S. each year – most likely in Toronto, London, or a city in Germany. Each team would play an international regular season game once every eight years, and “host” a game (meaning, give up a home game) once every 16 years. As part of this plan, the NFL has opened an international office in Frankfurt, adding to its London office (opened in 1989), Tokyo (1996), Toronto (1997), and Mexico City (1998). The league has used the American Bowl preseason format to test markets in Australia, Japan, and Central America. It has also extended its developmental alliance with the Canadian Football League through the 2006 season.
Look for the next “development ground” to be China. Executives are targeting the 2008 Summer Games in Beijing as a chance to further penetrate that market. As there are 33 cities in China with a population of three to eight million, and “thousands more” with up to three million people, look for NFL Chinese initiatives to continue to expand.
