GM says no to the Super Bowl

Is the automaker being shrewd or short-sighted?

By Jonathan Berr May 21, 2012 2:50PM
General Motors (GM) recently announced plans to pull its advertising from the Super Bowl, one of the most-watched television shows of the year. The automaker's move is either shrewd or short-sighted. It's difficult to say which.

GM's rationale for handing off its commercial time, according to The Wall Street Journal, is simple: Buying a 30-second advertisement for the National Football League's championship game has gotten too expensive.

It's not difficult to understand that view, given that prices for Super Bowl commercials soared almost 60% between 2001 and last season and are about to go up 9% for next year's game, the paper said.

Advertisers can no longer buy an ad on the Super Bowl just to be seen during the big game. They need to be able to prove to their boards of directors that they are getting a return that justifies the expense. Though the Super Bowl's audience is huge -- topping 100 million last year -- marketers want to make sure they are reaching the right demographics.  

One of the great advantages of Internet advertising is that it can easily target specific demographics so that advertisers can be sure they are reaching their intended audiences. Mainstream media like TV offers advertisers a larger audience, but their messages will probably reach many people who have no interest in receiving them.

The Super Bowl, for now, seems like it's worth the money. Last season's contest between the New York Giants and the New England Patriots was the most-watched show of the year -- the third time in a row that the big game earned that honor. Having two of the league's most storied franchises, from two major media markets, certainly helped.

Though CBS (CBS), which has rights to the 2012 Super Bowl, ought to be able find an advertiser to take GM's place, the automaker's move could unnerve executives at media companies. For years, they have counted on advertisers' willingness to pay ever-increasing rates to justify the huge expenses associated with sports programming.    

Under the terms of a nine-year contract extension signed last year, the NFL will generate about 60% more revenue from CBS, News Corp's (NWSA) Fox and Comcast Corp.'s (CMCSA) NBC. Walt Disney (DIS) signed a separate $1.9 billion deal, an increase of 73%,  to show games on "Monday Night Football."

The Super Bowl is still a slam dunk -- to mix sports metaphors -- for advertisers, though GM's move may make it harder for CBS to raise rates for the big game as much as it wanted.

Jonathan Berr is long CBS. Follow him on Twitter@jdberr.

25Comments
May 22, 2012 8:52AM
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I have never heard anyone say after the Super bowl game.."let's go buy a new car now or a bag of doritos".  Ridiculous waste of money if you ask me. Rather see them lower the price of the cars or put more CHIPS in the bag than spend it on over priced media moves.....now you get seven doritos in a bag!!  Someone has to pay for all that marketing......guess it is you and me.  no thanks.
May 22, 2012 8:06AM
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Sports in general may be getting "pulled" back a bit in the money generating arena.  It has become too costly, and sports is getting seperated from the mainstream populace.
May 22, 2012 8:12AM
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smart move on their part-waste of money at that price
May 22, 2012 8:43AM
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On a related subject...player salaries. WE are the ones that control these outrageous salaries. I don't know how to stop it, but as long as we are willing to pay sky-high prices at the gate, there is no limit. The owners will keep racking it in and slowly weed out the middle class. The very people that built the league.
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Great to see one part of the Government, Government Motors, attempting to cut unnecessary waste.
May 22, 2012 9:52AM
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Its a very small step in the right direction.
May 22, 2012 10:09AM
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GM has done the right thing .. for a change.
May 22, 2012 9:37AM
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well how about that GM finally got something right the adds are way out of line price wise every company should pull out and make the network bring down the cost on the other hand why the hell advertise gm every one knows you build cars and trucks even if there not worth driving home, that is if the piece of recycle beer can and plastic crap doesnt quit before you get home. now as far as the super bowl what a big piece of crap half time shows get worse every year the game stinks with a bunch of over rated way over payed union punks. course i am only told about cause a quit watching about three years ago cause its not worth my time commercial are stupid and so is the game
May 22, 2012 11:17AM
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And thus came the end of the advertising hype. And over inflated advertising pricing came crashing back down to reality.
May 22, 2012 11:46AM
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I have never bought anything based on a Super Bowl TV ad. Why would you????
May 22, 2012 11:46AM
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Finally, corporate managers are understanding what the public doesn't....high costs of sports (tickets, salaries, advertising, etc..) have begun to reach their proverbial "glass ceiling".  If other CFO's understood this, we'd all be happy.  Nothing is worth $9 million for a 30 second spot.  GM is wise to spend their money elswhere.  In the end, most viewers watch the ads for entertainment purposes and half the time, can't even remember what the product was in the ads.
May 22, 2012 9:16AM
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RICA TSY, You can't say it's a waste of money, when you don't know the return on investment.  We don't even know how GM measures the top-of-mind awareness of their ads/brand after they broadcast the ad. All we know is that GM probably did the math and concluded that given the other opportunities in the media marketplace, the Super Bowl was not worth the money.  They will promote their brands/message somewhere, just not at the Super Bowl.
May 22, 2012 10:16AM
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jerry58 wrote:                    "You're an idiot.."

 

Then it makes two of us

May 22, 2012 9:43AM
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On the advice of the president (Obama) of Government Motor, it will not support business as usual, it will rather count on bailout money should it need it. Therefore cancelling all ads for fear of retaliation from its president Mr. Barack Dictator Obama.
May 22, 2012 12:43PM
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We need to use all this money to pay back towards the millions we owe to our trillion dollar American losses! We also need to get our priorities on track!
May 22, 2012 9:58AM
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Smart decision, trying to market any product not wearing a bikini to a bunch of drunken and low-iq football fans can't produce any ROI.  Spend your money advertising during Indy Car and Nascar events that actually have an audience interested in and capable of actually driving a car!
May 22, 2012 12:13PM
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GM is missing the boat.  Granted Super Bowl ad/spot rates are out of sight.  GM best redefine

what their ads are trying to do.  Simply, put assess on the seats of thier products!  The media should also

 figure out what it is they want and that is sell time.   What about packaging both the internet and network

"package " media buys! ANd for heavens sake produce commercials/spots that talk about the product

offering that makes sense and not some offering that aggrandizes a creative's/art directors ego!

May 22, 2012 10:01AM
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Now that GM is 70% chinese that makes sense.

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