Strike drives up prices for Super commercials
Movie studios buoy Fox bounty, tooSuper Bowl ads have sold out at a much quicker pace than in recent years, and Hollywood is getting much of the credit.
Disney, Warner Bros., Universal, Paramount and Fox are among the studios that combined to buy more than 10 Super Bowl ads, escalating demand and helping Fox, this year's broadcaster, jack up the price. Last year, the studios bought only a few commercials during the game on CBS.
"When the number of movies that have come in year-to-year is drastically higher, it certainly helps," said Neil Mulcahy, executive vp sports sales at Fox Broadcasting. "It's all supply and demand. We didn't raise our prices until we only had a handful of units left, so the movies were a part of the whole movement to sell out the game."
While the abundance of studios buying spots helped Fox, the writers strike that began Nov. 5 created even more demand for the NFL's title game, helping the network sell the last six or seven spots by Thanksgiving and, in effect, pushing prices even higher.
"I think what the strike really did was create that final push when people realized the strike was going to happen and they weren't going to get original programming (to place ads in) in the first quarter," Mulcahy said. "I think that probably helped us with that last five or 10% of the units."
Fox sold all but one of 63 spots by late November, getting $2.7 million for a 30-second spot in most cases. For the final spot, the network is holding out for $3 million, which media buyers said it was having trouble getting since the commercial is in the second half and not the first in a pod.
Veteran Super Bowl advertisers like Anheuser-Busch that are buying numerous spots in the game could be paying much closer to $2 million or slightly less per spot.
Last year, a 30-second commercial cost $2.6 million on average. For the first Super Bowl in 1967, it was a meager was $42,000.
This year, Ryan Seacrest will host a red carpet for the stars of films that have bought time in the Super Bowl — with about 45 minutes of footage airing during the pregame show — and Mulcahy thinks that helped persuade many studios to advertise.
Another incentive, he said, is Fox's partnership with sister company MySpace to create an official Super Bowl-promoted profile page — where all the commercials can be viewed after the game and advertisers can offer consumers "calls to action."
"When we sold the Super Bowl three years ago, right up until the week of, we still were selling units, so this is unbelievably atypical," he said. "I'd like to give credit to my sales staff and the fact that we really got out there very early, right before the upfronts, with the whole MySpace and Ryan Seacrest (initiatives)."
However, most of the studios contacted by The Hollywood Reporter said the red carpet and MySpace ideas didn't factor into their decisions; they said they're buying into the New England Patriots-New York Giants game simply because the game will attract nearly 100 million viewers.
"The Super Bowl clearly remains the single biggest reach platform that's out there," said Sam Sussman, senior vp at Starcom. "Here's an event where the commercials take center stage, and there's really no other environment that has the commercials receiving such significant attention."
Several studio executives said they didn't know yet whether they were sending talent to the red carpet because of problems with logistics or concerns about their celebrities getting overshadowed by the Super Bowl marketing clutter.
Another factor being cited for the strong Super Bowl sales is the increasing movement of advertising dollars into live sports.
"The Super Bowl, because it's an event in and of itself, and the commercials are part of that event, is the last bastion of DVR-proof programming," said Jason Maltby, president and co-executive director of national broadcast at MindShare.
Last year, CBS sold only 70% of its spots by the beginning of the year. Media buyers said it has been years since a network reached a near-Super Bowl sellout as early as Fox has, mostly because of the pressure to produce extraordinarily entertaining spots and their costly price tags. In previous years, with significant commercial inventory remaining up until the week of the game, prices in some cases dropped.
"The Super Bowl has been well sold for quite some time with the writers strike, and especially with limited ratings available in the marketplace," said Kevin Collins, vp associate media director at Initiative. "There's no desirable programming to draw in the people you'd normally be getting this time of year."