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The Super Bowl

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Vannessa Goodwin

on 4 December 2014

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Transcript of The Super Bowl

The Super Bowl: More Than a Single-Advertising Event – a Social Media Frenzy
Summary
Main issues:
Analysis the high cost issue
Analysis of there being no solid evidence
Questions in the case
Questions in the case cont.
Alternative #1
Alternative #2
Alternative #3
Course of action for costs
Course of action for costs cont.
By: MaKayla Quam, Taylor Lemke, Vannessa Goodwin, Nathan Gutierrez, Elva (Lucy) Cardenas, Ashenafi Abebe
Customer Perspective
• The Super Bowl; it is one of the most watched television events of the year.

• The Super Bowl commercials are a must have for major companies.

• The question at hand is whether the commercials are worth the massive amounts of costs that go into making a Super Bowl commercial?

• With the game being the most watched event of the year, it’s the prime time for companies to air their commercials gaining them millions of viewers and in return exposing their products in more fruitful ways.
Comments? Questions?
References:
Armstrong, Gary, and Philip Kotler. "Company Case 12: The Super Bowl: More than a Single Advertising Event - a Social Media Frenzy." Marketing: An Introduction. Upper Saddle River, NJ: Prentice Hall, 2000. 545-47. Print.
Bergman, Corey. "What Happens When Everyone Debuts Their Super Bowl Commercials before the Game?" Lost Remote. N.p., 30 Jan. 2013. Web. 11 Nov. 2014. <http://lostremote.com/what-happens-when-everyone-debuts-their-super-bowl-commercials-before-the-game_b36383>.
CMO Network. “Yes, a Super Bowl really is worth $4-million”. www.forbes.com. 2014. Web. 12 Nov. 2014.
Nicholson, Caitlin. “The Super Bowl, Coca-Cola, and Multilingual America.” Lingualinx. Lingualinx, 3 Feb 2014. Web. 11 Nov. 2014.
Stelter, Brian. “TV ad sales slowdown the Super Bowl?” Money.cnn.com. 2014. Web. 12 Nov. 2014.
Turner Broadcasting System, Inc. “6 reasons Super Bowl commercials are overrated”. www.Bleacherreport.com. 2014. Web. 12 Nov. 2014.
Williams, James. “Is the Super Bowl Really Big outside the U.S.?” Sports Talk Florida. Genesis Communication, 31 Jan.2014. Web. 11 Nov. 2014.
Analysis the no concrete expectation for returns issue
1. What factors have played the biggest role in changing the dynamics of Super Bowl advertising in recent years?
• The increasing usage of the internet among consumers.
• With more and more individuals flocking to the internet and specifically social media sites
Twitter, Facebook, YouTube, Instagram
• companies can not only advertise during the Super bowl itself, but also before and after.
• Another aspect that has changed in recent years is the shift of focus from the product itself to how the product can improve your life.
• Instead of companies simply detailing the products features, they are accentuating how much better life is with that product.
2. Discuss the concepts of reach, frequency, and impact as they relate to Super Bowl advertising. How does consideration and planning for these concepts differ between the Super Bowl and other television events?
Global Marketing
• The Super Bowl is part of the American culture and it can be used in marketing in a global perspective, the game had showed how America has become a salad bowl of multi-ethnic cultures.

For example, the Coca-Cola commercial “It’s Beautiful” from last year’s Super Bowl that featured the song “America the Beautiful” sung in seven different languages, brought up a lot of controversy.
This lead to an outrage because of the use of a patriotic song sung in different languages, many felt that only English should be spoken in the United States. While others felt that the ad exemplified multiculturalism in the United States, making Coca-Cola a global brand.
The commercial conjured up a lot of emotions and got people talking about their product.

• America is a multilingual society and some facts to support this are:
America is a nation of immigrants with about 43 million immigrants living in the US right now.
There is no official language in some regions.
English is the de facto language while other states have adopted bilingualism.
By law the Federal Government must provide access to federal programs to those with limited English.
There are an increasing number of people speaking a language other than English in the US, in the survey “Language Use in the United States: 2011” as high as 21% of the population falls under this category.
There are about 381 different languages spoken in the US, with the most widely spoken are Spanish, Chinese, Tagalog, Vietnamese, French, Korean, and German.
Of the 381 different languages, about 169 are Native American in origin.
The total population that speaks Native American dialects totals about 370 thousand.

• The Super Bowl is a classic example of global marketing strategy; it is broadcasted to 198 countries and in more than 25 different languages reaching more than a hundred million new consumers.
Adverting costs
• Not only is the amount of viewers astonishing (108 million in 2013) but the advertisements are viewed in a different light.
• Advertisements during the Super bowl receive an equal amount of viewership if not more than the game itself.
• Advertising during the Super bowl means that a company has much greater reach than any other advertising opportunity.
• Not only that, but because companies now upload the ads to social media sights both before and after the game, the frequency of views is greatly increased.
• Also by utilizing tools that count Twitter and Facebook mentions, as well as YouTube views, companies can now measure the impact of their ads in near real time statistics.
3. When assessing return on investment, what objectives must Super Bowl advertisers consider?
• Buffalo Wild Wings.
• Before the game Buffalo Wild Wings could either present the entire ad on social media or just a portion, inviting customers to imagine the ending for themselves.
• During the game when the ad is played the marketing team will be ready to respond accordingly to either positive of negative feedback.
• Once the game is over this is a good time to measure the overall impact of the advertisement as well as the audience that was reached
• Because the Super bowl presents special marketing opportunities the price tag for a spot is hefty.
• In 2013, it cost $123,000 per second of air time for a company to obtain a spot in the lineup.
• Keeping this in mind, a company must set clear and concise objectives for itself when presenting a Super bowl ad.
• They must set internal goals for Twitter responses, YouTube views, and Facebook mentions that would render the ad a success in the eye of the company.
• It is proven that the costs of airing a Super Bowl commercial have risen substantially within the last 4 years and it is highly possible for the price to keep growing for the next few years, but there may be some alternatives to cutting down the costs.

• One alternative may be to lower the price for shorter commercials. Since it’s almost $100,000 per second for each 30 second time slot.

• If they were to reduce that time slot to around 20 seconds, then the prospective companies wanting to air their commercial would only have to pay $2 million, which is a huge difference in comparison to the $4.5 million that they will have to pay for this year’s big game.

• Each year the cost continues to grow and the major companies are more than willing to pay that outrageous price in hopes to increase sales.

In 2009, CBS charged $3 million for a 30 second commercial and in 2010 they decreased the price to range between $2.5 and $2.8 million.
The economy was in a stressful state and it took a lot more effort to sell time slots, so CBS made the decision to cut back the price.
The most expensive commercial to be aired for the Super Bowl was a Chrysler ad costing $12.4 million for a 2 minute time slot.

• The average price in 2014 for a 30 second time slot was $4 million which is 5% higher than in 2013 and 74% higher than in 2004.

• Some research shows that spending this kind of money can pay off in sales, but according to Jeri Smith the president of Communicus, 80% of Super Bowl ads don’t help sales at all.
The companies become so focused on creating the commercial for entertainment rather than focusing on persuading the consumers to purchase the product.

• In 2015, the ads may reach a cost of $4.5 to $5 million for a 30 second time slot.
• CBS has already started selling time slots and the registration is still going on.
• It all comes down to the question of whether spending this kind of money really benefits the company or not.
• One change that they made that paid off in past years was introducing the commercials to consumers before the big game day.
Volkswagen was the first company to air their commercial before the actually game in 2011.
Their marketing strategy worked with more than 12 million views on the internet and was the most buzzed about commercial on Twitter. Volkswagen also reported its biggest increase in sales in almost 40 years.

• As a consumer this was a new exciting thing that was happening. But now that a couple of years have gone by, the commercials seem to be more predictable and are shown almost way too soon.

• People love to feel the anticipation that the super bowl brings every year, and with companies showing their ads much sooner than the day of the game, the anticipation factor fades away.

• One way that companies are beating the possible down fall of producing their commercials too early is having the people vote.

• Many companies will now show part of the commercial and then have the consumers decide and vote on what the ending should be. The ending that wins the most votes will be the commercial that will air on super bowl Sunday.
YouTube is jumping on the band wagon of voting and has polls set up for after the game where consumers can vote on their favorite commercial that year.
YouTube’s role in super bowl Sunday continues to grow and has doubled every year since 2009.

• The internet is no doubt the most powerful influence on consumers and companies are finding ways to harness that power and use it to their advantage
Internet Marketing
The advertisements have a high cost with over $3 million to air and another $3 million to create.
The ads also have no concrete expectation for returns on advertising investments.
There is also no solid evidence to the Super Bowl being of value as an advertising venue.
• There’s many more to costs of a Super Bowl than just paying for airtime during the big game.
• One of the other key costs to air a Super Bowl commercial:
involves the costs of production
salaries of everyone involved
and all of the marketing research that goes into how effective the Super Bowl ads will be.
• It is said that the price of all these kinds of costs can triple or quadruple well over $1 million.

• There is no guarantee that they will generate as much revenue as they spent, let alone break-even.

• With the price of the Super Bowl ads growing at a rate of 50% each year within the last 3 years, this issue is getting more and more complex for companies to come up with a solid estimation on how much revenue they can expect to bring in.

• It is all just a matter of how effective the commercial will be to give the consumers watching the commercial the idea to invest in their product.

• It is a challenge since most of the consumers watching the Super Bowl ads are mostly watching it for the laughs and surprise of the commercial and less about the idea of actually consuming the product advertised in the commercial.

• It does not mean that the value of the Super Bowl advertising is as much as it’s actually worth as and advertising venue.

• It is possible for a commercial to air on another highly watched or rated televised event that might just generate as much revenue as if the same commercial was aired on the Super Bowl.

• Some reports go into as far as saying that the Super Bowl commercials are way too overrated for their actual value and that it is more of a gimmick than it is a practical, effective selling tool.

• This ties back into the previous issue because no company advertising in the Super Bowl can determine their change in revenue from their Super Bowl advertising compared to their standard advertising.

• One other alternative to cut advertising costs would be for the companies wanting to air their commercial would be to advertise multiple products in that one commercial.

This would save a company millions of dollars because they wouldn’t be purchasing multiple time slots for multiple products.
One example could be that car companies like Chrysler or Audi advertise multiple cars in one commercial instead of having the full time slot for one make/model.

4. Choose a brand that has not recently run a Super Bowl ad. Design an effective campaign with promotional tactics for before, during, and after the game.
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