05 April 2016
Startups
The Super Bowl is one of the year’s most important sporting events, but the last National Football League (NFL) game is increasingly relevant not only to football fans, but also to brands. It’s during the Super Bowl that they launch their most creative ads of the year—and in order to be successful, they have to stand out from the crowd and truly engage a demanding audience.
The game is key to the dozens of brands and entertainers who recognize the value of advertising during the Super Bowl. It is estimated that a single 30 second TV ad costs brands US$5.3 million to air during the game. Over the 50-minute halftime show, 100 commercials are aired—a total investment of US$530 million.
One of the brands that really stood out this year was Anheuser-Busch, which invested approximately US$59 million into 5.5 minutes of airtime, making it the Bowl’s biggest advertiser. Their commercial combined the Bud Light brand with the last season acclaimed fantasy series Game of Thrones, and its staging and dramatization elicited applause from the audience.
Some advertising, though, is unique; there are brands that get a lot of exposure during the game without commercials or banners. Tiffany & Co., for example, makes the Vince Lombardi Trophy (valued at US$25,000) and the white gold and diamond rings given to players (valued at US$5,000 each).
For some, though, the real show takes place during halftime. Big name entertainers vie to take advantage of the event, as it is a chance to be seen by more than 98 million spectators. Each year, roughly US$600,000 is spent on production, musicians and dancers to entertain the audience.
In 2019, Maroon 5 was the headliner, with special guests Travis Scott and Big Boi. However, it seems the show was not quite what audiences expected—it received a lot of negative reviews, with some even saying it was one of the Bowl’s worst thanks to the minimalist production from the lead band.
It would seem that trying to “keep it simple” was not a good idea, especially for an audience accustomed to highly elaborate performances. So far, the best-rated halftime show was Katy Perry’s in 2015, which was viewed by 118.5 million people. The benefits extended beyond the event itself, with Perry seeing a 211 percent increase in her digital sales during and immediately after the show.
The Super Bowl is a prime example of how advertising and sports are a perfect combination. With peoples’ attention glued to the event, it’s a perfect opportunity to position brands and products in the eyes of the world.
In my first blog about OTT and the Pay TV ecosystem in November 2015, I made a prediction that the current Pay TV model will not change that rapidly because the business model worked very well for existing incumbent players (i.e. Cable companies plus Pay TV Programmers). Moreover, in February 2016 I followed it up with data that showed that cord cutting was less than expected.
Two and a half years later, Pay TV HH’s continue to fall at about 2% per year. At the same time, OTT users in the United States are getting close to 200 million users, which represents 84% of all internet users.
We can argue whether this rate of decline represents a fast or slow disruption, but if we see how users are consuming media, we do notice a very rapid shift in consumption. In other words, “cord-cutting” is definitely happening, but also users who continue to have a Pay TV subscription are nevertheless watching less Linear TV than ever before. In this sense, I believe the Pay TV disruption is happening faster than I envisioned two and a half years ago.
As a consequence, it’s not surprising that Digital Advertising has surpassed TV Advertising in the United States.
By the way, all these slides are borrowed from Digital Capital Advisors’s excellent Perspectives On OTT paper.
Another way to see the progress of OTT platforms is that they have become original content powerhouses as well. In the last Emmy’s, the quality and breadth of their content became evident:
• Netflix tied HBO in Emmy wins, putting an end to HBO’s 17 year winning streak. It marks the first time in Emmy history that a streaming company has joined a traditional broadcaster in taking home the most awards.
• Amazon Prime’s show “The Marvelous Ms Maisel” won Best Comedy, Outstanding Writing for a Comedy Series, and Best Leading Actress in a Comedy
• Hulu’s “The HandMaid’s Tales” won an Emmy for Outstanding Production Design and another one for Outstanding Guest Actress in a Drama series (Samira Wiley)
As a conclusion, Pay TV is being disrupted faster than I anticipated and the industry is acting accordingly. Large players such as ATT and Comcast are integrating themselves vertically becoming major distribution and content powerhouses. The next five years will surely be interesting in this frenetic and dynamic media world!
