Super Bowl ads: Punt of no return? Advertisers paying $2.4 million per 30-second spot

By William Spain, MarketWatch

CHICAGO (MarketWatch) — Behind all the hype about the high cost and the battle for creative dominance lies the big question about the big game: Is spending zillions of dollars to produce and air ads during the Super Bowl a savvy investment, or a punt of no return?

Or is it both?

Figuring out the precise payback from any TV ad, or series of ads, is next to impossible, and that is no different for the ones that run during the Super Bowl Sunday. Immediate sales increases after a Super Bowl ad that can be directly traced back are rare, one of the factors that keeps so many normally free-spending names on the sidelines.

What marketers do know, though, is that their ads will actually be watched, avidly. They have become such an integral part of the event’s broadcast that, unlike during the most popular prime-time shows, very few viewers flip channels or hit the bathroom during commercial breaks.

“It is the biggest media event in the country and the only one that people tune in to watch the commercials,” said Ken Kaess, chief executive of Omnicom Group’s (OMC: news, chart, profile) DDB Worldwide, which has more clients in Sunday’s broadcast than any other ad agency — a list that includes PepsiCo (PEP: news, chart, profile) , Anheuser-Busch (BUD: news, chart, profile) , McDonald’s (MCD: news, chart, profile) and Tabasco.

In addition to that rapt attention, there is usually plenty of pre- and post-game buzz, Kaess added: “If your ad is successful, it’s incredible how much PR value you can get out of it.” Watch interview with DDB’s chief executive.

And that helps Super Bowl spots seem to defeat ad-killing technology like TiVo (TIVO: news, chart, profile) , he said. Last year, four of the top five most popular TiVo downloads were commercials; the other was the notorious Janet Jackson breast incident that got Viacom (VIA: news, chart, profile) in trouble, according to Kaess.

Paying $80,000 a second

Last year’s game was watched by an average of 89.8 million viewers, the highest since 1998, according to Nielsen Media Research. A 30-second spot cost an average of $2.3 million, and there were 49 minutes and 25 seconds of commercial time aired.

This time around, the price has tweaked higher to $2.4 million — about $80,000 a second. And with teams from two of the top five TV markets facing off for the first time in 25 years, there is no reason to believe viewer numbers will go anywhere but up.

Advertisers can find other ways to get in front of that many eyeballs, albeit not all at once. What they can’t get anywhere else, though, is the guarantee that they will watch.

After the 2004 Super Bowl, an ad retention study by Initiative found an average retention rate of 97.6 percent. Depending on positioning within the game and within the commercial “pod,” some rates were as high as 100 percent. H&R Block (HRB: news, chart, profile) , Microsoft (MSFT: news, chart, profile) , Anheuser-Busch and Altria (MO: news, chart, profile) hit that triple digit, while the worst performer — a federal antidrug ad — still managed an impressive 96.9 percent.

“It is an incredible opportunity to make an impact, to move the needle, just pick your cliche,” said Tim Spengler, director of national broadcast for the Interpublic (IPG: news, chart, profile) media buying firm. “It is a platform like no other in media, because you are looking at an event that that has the whole country galvanized to a single TV show, which never happens any other time.”

Spengler, who buys for Home Depot (HD: news, chart, profile) and Time Warner’s (TWX: news, chart, profile) AOL, among other brands, added that even if sales don’t immediately bounce after the game, there are other ways of telling if it was a win.

“There are a number of metrics other than correlation of short-term sales. It might be a success from a trade perspective; you might have better heft in getting your products [distributed],” he said. “There are so many variables in a given marketing mix. There is always going to be art in this business.”

None of the Super Bowl advertisers contacted by MarketWatch would specify what makes for an acceptable return on the investment. That is possibly because even with all the fuss, they still just can’t tell.

Anheuser-Busch in particular — typically the biggest spender, with better than five minutes of ad time bought in each of the last three Super Bowls — declined any comment at all.

“The ad industry has not figured out how to connect the dots,” said Steve Fredericks, chief executive of ad tracker TNS Media Intelligence. “So far, all we have been able to glean at best are correlations. The data just aren’t available to measure how many people watched a commercial.”

Show me more than the money

Another issue is that Super Bowl ads are judged by their entertainment and aesthetic values rather than by return, according to Mark Stevens who runs the consultancy MSCO and is the author of the book “Your Marketing Sucks.”

“The Super Bowl is a great place to advertise if you can afford it and if you can deliver on what you are doing,” he said, asserting that many of the game’s advertisers cannot.

“That is an exercise in stupidity. … You don’t know what the best ads are because those commercials haven’t sold anything yet,” he added. “This just highlights an issue that is applicable every single day of the year in every place that you advertise.”

Indeed, getting too creative — trying to break through the clutter — can backfire. Late Wednesday, Ford’s (F: news, chart, profile) Lincoln-Mercury division abruptly yanked an ad that was designed to launch a new luxury truck.

The spot, created by WPP Group’s (WPPGY: news, chart, profile) Young & Rubicam, featured a priest getting keys to a Lincoln Mark LT on a collection plate and later spelling out “lust” as the topic of his next sermon; it will be replaced with a spot featuring a convertible Ford Mustang. (Watch Ford Mustang ad. Also see Ford trucks commercial.)

Ford executives, who discussed the withdrawn ad at length on Tuesday, declined to return phone calls after the decision not to use it.

Sometimes an advertiser is not expecting much out of a Super Bowl ad, but only trying to make sure a counterpart doesn’t get anything either. That is especially true in cutthroat competitive categories.

“If you don’t put in an appearance, your credibility as a brand suffers,” said Tom Pirko, head of beverage consultancy Bevmark. “You have to be there because if you are not, one of your competitors will swallow up all the oxygen. Whatever the return is, you just buck up and pay it.”

William Spain is a reporter for MarketWatch in Chicago.