This post originally appeared at 24/7 Wall St.
A 30-second ad spot in this year’s Super Bowl costs an average of $3.5 million. That’s an 84% increase from 10 years ago and the highest amount advertisers have ever had to pay.
While that is quite the price hike, it is in line with the growth in TV audience, which has just about doubled over the past decade. But despite spending this much to reach such a massive audience at once, the results are rarely impressive.
See The Eight Brands That Wasted the Most on the Super Bowl >
Between 2002 and 2011, companies spent $2.5 billion on Super Bowl advertising, based on 24/7 Wall St.’s estimate. The top 10 spenders were responsible for more than one-third of that. And one company, Budweiser maker Anheuser-Busch, spent almost $250 million over the past 10 years on Super Bowl ads, or a whopping one-tenth of all Super Bowl ad spending.
24/7 Wall St. ranked total spending for all of the companies that advertised during the Super Bowl in the past decade. An analysis of the top spenders reflects how bad this investment can be. While some, such as Hyundai and Toyota have improved market share over that time, most have not. Based on total ad spending, product failures, change in market share, share price and sales, we identified the eight brands that wasted the most on the Super Bowl, including mega brands such as Coke, Budweiser, GM and Ford.
Based on 24/7 Wall St.’s analysis of Super Bowl ad spending, the top spenders fall into four major categories: automotive, film, food, including snacks and fast food, and beverages. Four of the top 10 Super Bowl advertisers are auto companies. Another four of the 10 are food and beverage manufacturers. Three movie studios are in the top 25.
Because Super Bowl ads are used by a small number of industries, many companies in those industries are forced to advertise just to keep up. Most of the top 10 spenders are perennial also-rans. Yum! Brands, owner of KFC, Taco Bell and Pizza Hut, spent $67 million over the past 10 years. Meanwhile, McDonald’s, the indisputable market leader, spent less than half that amount and is not a top 10 spender. Similarly, E*Trade, well-known for the talking baby campaign, spent more than any other online brokerage firm, yet remains fourth in the industry.
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24/7 Wall St. tabulated all of the commercials from the past 10 Super Bowls, as archived by Adland, the “world’s largest archive of Super Bowl commercials.” Using that data, 24/7 calculated the number of commercials each company bought, as well as their length, including any available pregame, postgame and prime advertising commercials. To estimate the total amount each company spent on Super Bowl advertising in the past decade, we used the average costs of a 30-second commercial spot each year and the total number of minutes of advertising time recorded by Adland.
8. E*Trade
Total ad spending (2002 – 2011): $35.9 million
Super Bowls advertised in over past 10 years: 6
Average ads per Super Bowl: 2.5
Change in share price (2002 – current): -91.1%
Change in market share: n/a
E*Trade (NASDAQ: ETFC) has run Super Bowl ads in the past five years, as well as in 2002, attempting to make headway against larger online trading competitors Fidelity Investments, Charles Schwab and TD Ameritrade. With an average of two and a half ads per game, E*Trade has run 6.75 minutes of Super Bowl ads over the past 10 years. Although the company’s ad campaigns have varied, its most popular commercial is the E*Trade talking baby, which debuted during Super Bowl XLII in 2008. Although that ad resulted in a record-breaking number of new accounts for the company, E*Trade’s overall share price has decreased 91.1% since February 2002.
7. Ford
Total ad spending (2002 – 2011): $36.3 million
Super Bowls advertised in over past 10 years: 5
Average ads per Super Bowl: 2.2
Change in share price (2002 – current): -17.1%
Change in market share: 20.2% (2002) – 16.8% (2011)
Despite the fact that Ford (NYSE: F) is one of the most iconic American brands, it has not run an ad during the Super Bowl since 2008. In that year, the company only ran one 30-second commercial. Competitors GM and Hyundai ran several ads that year and have each run at least five since then. When it was still running commercials, Ford advertised specific cars and trucks, including the Focus, Escape and the F-150. The 2006 commercial for the Escape Hybrid featured Kermit the Frog, who reported that it was actually “easy being green.” While the advertisement was memorable it also marked the year Ford peaked. Since then, sales have dropped 80%.
6. Warner Bros.
Total ad spending (2002 – 2011): $48.6 million
Super Bowls advertised in over past 10 years: 4
Average ads per Super Bowl: 4.75
Change in share price (2002 – current): -51.6%
Change in market share: 11.7% (2002) – 17.9% (2011)
Warner Bros. has spent an enormous amount of money over the years advertising major motion pictures during the Super Bowl. Some of these movies, such as The Matrix Reloaded, Troy, and Batman Begins, ended up becoming highly successful blockbusters. In fact, showing movie trailers during the Super Bowl is a growing trend. Last year, a record 14 trailers were shown. Warner Bros. studio market share has increased from 11.7% to 17.9% between 2002 and 2011. However, many of the movies the company has advertised during the Super Bowl were complete flops. Films like Poseidon and Constantine grossed far less in the U.S. than it cost to make them. Terminator 3 grossed $150 million domestically — nearly $50 million less than its budget — despite the fact that Warner took out more than two minutes in ads for the movie during the Super Bowl that year.
See the rest of the story at Business Insider
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