How Google cashes in on the Super Bowl ad blitz
YouTube reaps the rewards as companies try to build buzz for their lavish commercials.
By Kyle Stock, Bloomberg BusinessWeek
The Denver Broncos might be favored to take the trophy on Sunday, but Google (GOOG) has already been winning the Super Bowl for weeks.
The tech giant's YouTube platform has welcomed a windfall from companies trying to build buzz for the lavish commercials they will air during the big game. Some 17 corporations have already posted "teaser ads" on YouTube, according to Google, and while they're free to post, these companies are paying for promotion spots on mastheads, through search results, and in front of other YouTube videos.
Yes, the Super Bowl has now given us ads for ads for ads, if you will.
The Super Bowl ad contest, it turns out, is increasingly similar to a presidential campaign -- it's all about the crucial weeks of expensive and calculated preparation leading up to the big day. Last year viewers watched 265 million Super Bowl commercials on YouTube, about 2.6 times more than in 2012, according to Google.
What's more, almost one-third of those video clicks came before kickoff. "The scoreboard of the Super Bowl has become YouTube views," Lucas Watson, Google's vice president of global brand solutions, said at a breakfast in Manhattan last week.
Ironically, as Super Bowl airtime becomes more expensive, it has become critical for companies to spend heavily to prime viewers. The risk of getting drowned out by dozens of other advertisers -- or being skipped over by channel changers -- is too great not to hedge against. (The "players" in this year's Puppy Bowl look formidably adorable).
A 30-second Super Bowl ad now costs an estimated $4 million. British automaker Jaguar (TTM) shelled out for 60 seconds of big-game airtime, plus another $5 million to alert audiences via Google and other outlets to keep an eye out for the spots, according to The Wall Street Journal. The carmaker's YouTube teaser, featuring actor Ben Kingsley, was posted Jan. 15 and had garnered almost 14,000 views by Monday morning.
Google certainly isn't the only company cashing in on the extra-long advertising warm-up. Every social-media platform is getting a piece of the action, as are old-school advertising forums. In addition to its YouTube blitz, Jaguar paid New York's mass-transit authority to wrap city subway trains in ads touting its Super Bowl spot.
YouTube is quickly becoming a cornerstone of digital media strategy even beyond the Super Bowl. Last year it welcomed almost $6 billion in advertising revenue, an increase of more than 50 percent over 2012, according to estimates by eMarketer. With an ad haul of $66.5 billion, traditional television isn't that far ahead.
Google, meanwhile, expects the Super Bowl ad blitz to come earlier next year. "It will become sort of like shopping season," Watson said. "The day after Christmas, it will be game on."
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