GM says no to the Super Bowl
Is the automaker being shrewd or short-sighted?
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.
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!
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Why are stronger numbers considered bad news? Investors are worried about the impact on inflation and interest rates.
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