This article uses a lot of numbers to make not very strong arguments.
Lets assume that as a media planner, you have the bag of money under your desk to plausibly be discussing buying a Superbowl spot. You are already spending millions of dollars on media every month, the question is - will the Superbowl spot yield more than other channels ?
For some small set of advertisers in this decision matrix, there's also the question of whether the media production cost is worth it (hello coinbase). For the vast majority of decision makers in this position, the media production budget is already getting spent.
Lets say the spot plus extra cost is $10m to use a nice round number.
You have an expectation of how many new users or website visitors your media budget typically delivers for $10m, because you spend that regularly (monthly, quarterly, it doesn't matter, but the point is that your spend has been growing).
So the decision is really really simple. Superbowl or the other places you've been shoving $10m. Sometimes it works, sometimes it doesn't, but usually its like eh compared to the other places you've been shoving your $10m, underwhelming. Which is why you see justification pieces like this.
Sorry it's just f'ing bizarre we're talking about throwing TENS of millions for "advertising" instead of shit that actually benefits people and the world.
Meanwhile some people complain about space programs etc. wasting money.
At least it's not Facebook or other online monster. When I read the piece I thought if it wasn't for superbowl that money would have went straight in the garbage.
I think this is true if you evaluate it purely as a performance channel, but I suspect most Super Bowl buys aren't competing with search/social on the same axis
Let me give you the counterpoint that is increasingly hard to ignore :
You can reach the same users on search and social that the Superbowl will give you and if you can convert them more efficiently, where should your $10m go ?
The newfangled wisdom is that customers are at least as effective branding as the Superbowl
This has always bugged me. $7 million for a 30-second-long ad. What do they get out of it? Well, presumably, a change in peoples' concrete behaviors that is more than $7 million. They expect that (otherwise they wouldn't buy the ad in the first place).
At the same time, we're told that all the sex and violence on TV doesn't matter, because it doesn't change peoples' behavior.
So, which is it? Does what we watch on TV change our behavior, in concrete ways, or doesn't it? I suspect that it does change our behavior, that the advertisers are right. (They're betting a lot of money on their position; I'd expect them to have some basis for doing so before committing that kind of coin.) But if so, then the rest of what we watch also changes our behavior.
>This has always bugged me. $7 million for a 30-second-long ad. What do they get out of it?
Super Bowl ads are about brand building. They're not conversion ads. Their direct impact is to reduce CPC (cost per conversion) on other advertising.
Say you have to pay $100 per instagram conversion. Users see your ads cold and need a lot of convicing. Most won't pay attention long enough for your ad to convert. You need them to see a lot of ads.
But after they've seen your brand plastered all over the Super Bowl (and other brand opportunities), those same instagram ads might start converting at $90 per conversion. Users see your ad and go "Oh yeah I remember that brand, lemme check this out"
> Another study from 2015 showing that credit card logos increase estimates of item value
Notably, the abstract of the 2015 study specifically points out that the 1986 study has frequently failed to replicate, and although it finds an effect, the 2015 study has n = 28. As always with psychology studies, we would do well not to assert their purported findings as facts, as with the statement "The brand effect is so strong that displaying a Visa logo near checkout literally increases consumer spend". Psychology as a field is far too unreliable to make such assertions with confidence.
It's not just a single run of the ad. The same ad is run many times over, on other TV programs. It's promoted on social media. People see it and think "Oh yeah, that was a super bowl ad" and that makes it more memorable, and they associate it with the fun they had watching the game.
There is the cache for everyone involved in creating the commercial. So, nice feather in the cap for the hundreds of people who get to touch it.
I have no doubt advertising has some effect on consumer preferences. However, I am a skeptic that one more Coke Cola ad aired at the Super Bowl meaningfully changes sales relative to the billions they already spend elsewhere.
> I am a skeptic that one more Coke Cola ad aired at the Super Bowl meaningfully changes sales
It actually might. Coca Cola had $48b revenue last year, or in other words, 4800 millions. Spending 7 of those millions to put your product in front of 100 million people seems like a reasonable bet. If even a couple percent of those people are (sub)consciously influenced to pick up a 12-pack the next time they stop by a store when they might otherwise not have, it would likely be a profitable endeavour given the profit margins on their sugar water.
I think there's also a longer-term status play at stake. If only one of Coca Cola or Pepsi engaged in flashy advertising to this degree, it might give them a slight edge in status perception. In the long term, even an 0.1% shift in consumer preferences between Coca Cola or Pepsi would shift significantly more than 7 million in value. So if one of them engages in this, the other is obliged to follow, in a classic prisoner's dilemma. At any rate, given that 4800 millions in annual revenue translates to 13 million in sales per day, the number paid for that advertisement is a rounding error and doesn't have to move the needle very much at all to be successful.
I think it reflects a broader difference in philosophy: US sports are optimized as media products first, sporting events second, whereas in Europe it's historically been the other way around
I was yet again shocked at just how little football is actually shown to viewers of the Superbowl. You cut away from commercials to already running plays. You miss everything.
The Superbowl cares more about viewers who don't watch football.
Luckily this time there wasn't much football to watch anyway.
Super Bowl ads, in particular, really are their own thing. People will even watch them later, discuss, share, etc.
There are some people who have more interest in the Super Bowl for the ads than the sport.
So I'd say it's not money flushed down the bowl.
Random fun fact: 20ish years ago, I used to work at a web hosting company that had superbowlads.com (iirc) as a customer. I'm not surprised it's no longer an actual site, though: I speculatively doubt NFL lawyers would've left it alone.
The author keeps saying, over and over, that the reason this is a good bet is because "the downside is capped and the upside is asymmetric" as if that's some ground-breaking realization.
Sorry, but obviously the downside is capped. The downside of virtually any marketing investment is capped at the cost of the media buy...And, the upside being "asymmetric" isn't some saving grace. What matters is the likelihood that you actually realize that asymmetric upside. And, nowhere in the article does he talk about Ro's estimated success likelihoods or actual outcomes.
In short, he's basically saying:
- I made a bet
- It costs me something ("capped downside")
- There's a potential payout ("asymmetric upside")
- I have no idea whether this is positive expected value
The downside isn't really capped as in most cases there's a big dev effort to prep for an event like that. Plus a lot of spend on the day of the event to deal with the surge. This can easily be in the millions as well, in direct cost as well as in opportunity cost
This is also kinda wrong because the downside can be a lot more than your marketing spend if people really hate your ad. Just look what happened when Budweiser decided to send a personalized Bud Light can to a transgender person. For the Superbowl specifically, I can't imagine the "Search Party" ad helped Amazon sell more Rings.
Yeah but this is footnote territory. The idea of a cap is more appropriate for most advertisers. There’s a minor chance you miscalculate and the cap dissolves. It kind of goes without saying as that always applies, possibly can have high magnification if too far off the mark.
Or Gillette. Or Jaguar. Wrong sort of advertising can provably destroy your brand image among your consumers. Social media helps to amplify things in both directions. So you really need to know your audience's current mindset. Or wrong move could lead to losing lot more than just any money and manpower spend on the ad.
Readit News
Lets assume that as a media planner, you have the bag of money under your desk to plausibly be discussing buying a Superbowl spot. You are already spending millions of dollars on media every month, the question is - will the Superbowl spot yield more than other channels ?
For some small set of advertisers in this decision matrix, there's also the question of whether the media production cost is worth it (hello coinbase). For the vast majority of decision makers in this position, the media production budget is already getting spent.
Lets say the spot plus extra cost is $10m to use a nice round number.
You have an expectation of how many new users or website visitors your media budget typically delivers for $10m, because you spend that regularly (monthly, quarterly, it doesn't matter, but the point is that your spend has been growing).
So the decision is really really simple. Superbowl or the other places you've been shoving $10m. Sometimes it works, sometimes it doesn't, but usually its like eh compared to the other places you've been shoving your $10m, underwhelming. Which is why you see justification pieces like this.
It seems all guesswork to me. User journeys and decisions are not well enough understood to say, "If I spend $1 here, it’ll return $x".
Of course, marketing people come up with all kinds of calculations to show it’s possible.
That or I’m completely ignorant.
The power of math is its understanding of you, not your understanding of it.
That's how marketing works.
Meanwhile some people complain about space programs etc. wasting money.
(Not taking a position on space programs. Tax-funded programs deserve more inspection than privately-funded programs.)
Let me give you the counterpoint that is increasingly hard to ignore :
You can reach the same users on search and social that the Superbowl will give you and if you can convert them more efficiently, where should your $10m go ?
The newfangled wisdom is that customers are at least as effective branding as the Superbowl
At the same time, we're told that all the sex and violence on TV doesn't matter, because it doesn't change peoples' behavior.
So, which is it? Does what we watch on TV change our behavior, in concrete ways, or doesn't it? I suspect that it does change our behavior, that the advertisers are right. (They're betting a lot of money on their position; I'd expect them to have some basis for doing so before committing that kind of coin.) But if so, then the rest of what we watch also changes our behavior.
And, obviously, so does our social media feed...
Super Bowl ads are about brand building. They're not conversion ads. Their direct impact is to reduce CPC (cost per conversion) on other advertising.
Say you have to pay $100 per instagram conversion. Users see your ads cold and need a lot of convicing. Most won't pay attention long enough for your ad to convert. You need them to see a lot of ads.
But after they've seen your brand plastered all over the Super Bowl (and other brand opportunities), those same instagram ads might start converting at $90 per conversion. Users see your ad and go "Oh yeah I remember that brand, lemme check this out"
The brand effect is so strong that displaying a Visa (or Mastercard or Amex) logo near checkout literally increases consumer spend. Study from 1986: https://academic.oup.com/jcr/article-abstract/13/3/348/18224...
Another study from 2015 showing that credit card logos increase estimates of item value: https://www.semanticscholar.org/paper/Effect-of-Credit-Card-...
Notably, the abstract of the 2015 study specifically points out that the 1986 study has frequently failed to replicate, and although it finds an effect, the 2015 study has n = 28. As always with psychology studies, we would do well not to assert their purported findings as facts, as with the statement "The brand effect is so strong that displaying a Visa logo near checkout literally increases consumer spend". Psychology as a field is far too unreliable to make such assertions with confidence.
It gets discussed for free on HN.
I have no doubt advertising has some effect on consumer preferences. However, I am a skeptic that one more Coke Cola ad aired at the Super Bowl meaningfully changes sales relative to the billions they already spend elsewhere.
It actually might. Coca Cola had $48b revenue last year, or in other words, 4800 millions. Spending 7 of those millions to put your product in front of 100 million people seems like a reasonable bet. If even a couple percent of those people are (sub)consciously influenced to pick up a 12-pack the next time they stop by a store when they might otherwise not have, it would likely be a profitable endeavour given the profit margins on their sugar water.
I think there's also a longer-term status play at stake. If only one of Coca Cola or Pepsi engaged in flashy advertising to this degree, it might give them a slight edge in status perception. In the long term, even an 0.1% shift in consumer preferences between Coca Cola or Pepsi would shift significantly more than 7 million in value. So if one of them engages in this, the other is obliged to follow, in a classic prisoner's dilemma. At any rate, given that 4800 millions in annual revenue translates to 13 million in sales per day, the number paid for that advertisement is a rounding error and doesn't have to move the needle very much at all to be successful.
Résumé-driven marketing
Pretty obvious gap in the logic to consider only monetary downsides, right before listing all thos non-monetary upsides.
The Superbowl cares more about viewers who don't watch football.
Luckily this time there wasn't much football to watch anyway.
https://www.youtube.com/watch?v=tqXOcRtZoow
I'm not familiar with American culture, but are the following true?
1. More than half Americans watch it.
2. People don't go to toilet during breaks/ad time.
Otherwise it's just money flushed down the bowl..
There are some people who have more interest in the Super Bowl for the ads than the sport.
So I'd say it's not money flushed down the bowl.
Random fun fact: 20ish years ago, I used to work at a web hosting company that had superbowlads.com (iirc) as a customer. I'm not surprised it's no longer an actual site, though: I speculatively doubt NFL lawyers would've left it alone.
Sorry, but obviously the downside is capped. The downside of virtually any marketing investment is capped at the cost of the media buy...And, the upside being "asymmetric" isn't some saving grace. What matters is the likelihood that you actually realize that asymmetric upside. And, nowhere in the article does he talk about Ro's estimated success likelihoods or actual outcomes.
In short, he's basically saying:
- I made a bet
- It costs me something ("capped downside")
- There's a potential payout ("asymmetric upside")
- I have no idea whether this is positive expected value