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January 16, 2015
Has the Super Bowl Reached Brands' Willingness to Pay?
 
Willingness to pay. What an interesting concept.

Those who begin studying marketing and economics during their academic days have no doubt combed over this subject. A consumer's willingness to pay (WTP) is incredibly important to test and discover. If a brand is way below, then it could run the chance of being considered a commodity; easily substituted, and most importantly, the brand can be leaving money on the table. If a brand is way below the scale, then the brand runs the chance of being considered too much of a hassle for what the brand is worth.

Could the Super Bowl be pushing the latter scenario? The nearly common sentiment is, in fact, yes.

It has come out that several automakers, beer brands, and consumer lifestyle brands are foregoing the $4.5– $5-million-dollar 30-sec ad spots during the big game in order to concentrate on digital marketing efforts around the same time, for a fraction of the price. If the Super Bowl is supposed to gather hundreds of millions of eyeballs to the ads, why in the world would these brands choose not to participate?

It is the conversion of those eyeballs that is the issue. Sure, targeting 500 million people at one time is chump change in comparison to what the brand is spending on the Super Bowl. But if only 2% of those eyeballs take a look at your brand, and less than half of those consumers actually turn into a sale, the cost of the ad spikes outrageously high.

Also, the message has to be different. It must be more entertaining than informative in order to get attention. In many cases, that is simply not ideal. If a brand is introducing itself for the first time, or if a brand has a new product, having that stage is awesome. But only a few brands can pull together an entertaining and informative introduction spot. We're not saying it's never been done, but the brands that nail it are few and far between.

If Super Bowl ads are costing more than they are worth, what's going to happen? In a pure free market, there would be a conversation between the brands and the networks to get to a price point where everyone wins. Will that happen? With the rise of shareholders and the quest for the ever-expanding dividends, we doubt it.

But for brands to see the value of advertising in the Super Bowl again, something has to change.

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Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.
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