LA Rams Win Super Bowl LVI, What This Means for TV Advertising
March 2, 2022 | Tune in to the podcast here.
Super Bowl LVI ads cost $6.5 million per 30 second commercial and that’s not even the crazy part. I never looked into the business of Super Bowl ads until this year but what was most surprising to me was that the price increased by a whole million from last year. 2017 was when the price surpassed the $5 million mark but it only increased by about $200-$300K per year until 2021, when NBC sold ads for $5.5 million.
Viewership rebounded as well by about 6% from 95 million last year to 101 million this year. This is still pretty far from Super Bowl XLIX in 2015 that still holds the record for #1 most watched television broadcast in the US, commanding 114 million viewers.
Prime time advertising during the Super Bowl is certainly about more than just reaching the most number of viewers at the same time. You have the obvious bragging rights that brands are able to have as advertisers during the broadcast. This of course catapults your brand into being one of the most iconic brands in American culture. Budweiser, Coke, Doritos and Tide are the most American of brands out there, even if some of these brands haven’t been participating lately.
Coke actually decided to not participate in Super Bowl ads for the second year straight but many other brands had some pretty good commercials. I was pleasantly surprised to see Eugene Levy and Catherine O’Hara in Nissan’s first Super Bowl commercial in 7 years. I am a late but huge Schitt’s Creek fan, that show is just so heartwarming.
But what exactly do brands get from advertising during the Super Bowl these days? Or more broadly, linear TV.
When linear TV was the most popular form of advertising, it really was just about reaching the most amount of people. You purchased on a CPM model and your CPM or cost per thousand impressions increased based on Nielsen ratings. Now, how companies determined the payoff was essentially a lift in overall sales. Not quite the best form of attribution but, before the internet, brands didn’t really have channels outside of broadcast and cable TV, radio, newspapers and other print media.
Connected TV grew something like 60% in 2021 to about $14.5 billion in spend. This is essentially how you buy ads on streaming platforms like Hulu and Peacock. With CTV though, you are able to identify the types of viewers you want to show ads. You also get your standard performance metrics - impressions, reach and frequency. Not to mention, you also get to choose how frequently you serve your ads to your target audience.
By comparison, there really is more appeal to purchasing TV ads programmatically because you know exactly who will be seeing your ads and how much it costs to reach them.
CTV is becoming increasingly popular, especially with cord cutting continuing to persist. I believe it’s estimated that 30% of US consumers cut their cords in 2021. Comcast lost about 2 million subscribers in Q3 last year vs prior year. However, CTV ads haven’t really taken its place. Last year, there was some $64.5 billion spent on linear tv ads, down about 1% from 2020. Other estimates say it was down 4%, so really not a huge drop either way. When we compare CTV dollars vs TV, the latter is still outspending by about 4.5x.
By all accounts, TV ad dollars are declining but the rate is surprisingly slow. Surprising at least for me, someone who has not subscribed to cable for any part of my adult life. There’s really two schools of thought here. One, shifting from TV doesn’t equate to a proportionate shift to CTV; and two, there’s a fundamental hindrance to shifting from linear TV.
Let’s tackle the second first. This basically means that the brand cannot drive awareness at such a scale that digital can deliver. There may be underlying reasons why but for simplicity I’m grouping all those reasons as a hindrance that cannot otherwise be solved.
The first means that dollars pulled from TV ads aren’t necessarily going to CTV. Brands have likely found Search or Facebook ads or any other measurable channel much more appealing because those have more reliable attribution models. If I were a brand selling goods online, I know that I can funnel my marketing dollars to Instagram and track the revenue I am getting back from those dollars - or, what marketers call ‘return on ad spend’.
If you really think about the difference between linear TV and connected TV, you’ll quickly realize that there isn’t much difference in terms of their ability to prove their impact. Even with CTV, what you get is the control you can take in delivering your ads. You can choose the streaming service, audience targeting, location targeting, device type, time of day and frequency. Linear TV allows you to choose between broadcast and cable, DMA I believe and time of day as well. CTV certainly has more granularity but it's still generally the same levers as linear.
Linear actually has something CTV doesn’t quite have just yet. Local news is still a very captive audience and ads served alongside that content is generally more effective. Think of people tuned into local news as wanting to know what is going on and also aware that that content will soon expire. This versus someone who is watching How I Met Your Father (one of my new favorites) at 8pm on a Thursday night, would be more focused on the content. That’s at least my understanding of the general appeal of TV ads these days.
Now, because local news is also a trusted source, brands who serve ads during these times, get sort of a halo effect of that trust as well. This is a primary reason why TV ads are still very appealing. Brands that have enough budget to have TV ads are probably brands that I can trust, is the mentality people are going on.
CTV, even in its real time nature with its advanced targeting and control capabilities, still struggles to prove the impact of each of its impressions. Someone streaming doesn’t have a seamless experience to interact with that brand.
There was a technology a few years ago called Search Sync. I think that was the actual product name. I can’t quite remember. They essentially allowed paid search advertisers to bid up on, I believe, branded terms. It’s been a few years and it will soon become clear why I can’t remember them but I think the product allowed brands to bid up on paid search, branded terms only, as their TV ads were airing. The premise is that people watching TV are also on their mobile devices, the number they were throwing out was something like this was the behavior of 82% to 90% of viewers.
When this was presented to me, I automatically shut it down. At least from my own personal consideration. It just didn’t quite make sense to need to bid up on branded terms when the intent was so high. Sure maybe there’s competition and you want to prevent your viewer from clicking on a competitor’s ad. This was actually their entire proposition. However, I still think that the brand recall would be so high in that moment that the user will look for that brand. And by that, I don’t mean just paid ads, it could be organic listings or even direct to site. I would inject some data here to support my theory but this particular company doesn’t seem to exist anymore and that speaks for itself.
There is, though, a new provider of this technology called Upzing. They’re powered by Wideorbit, which is in the business of serving ads on broadcast TV, digitally. My understanding, and this may not be the most accurate, is that they are making the TV ad buying experience become a digital one. Their website talks about billing and other administrative functions so I’m fairly certain this is a company that is trying to be the tech provider behind broadcast ads.
Their unique proposition is that they have access to tv ad data and brands can capitalize on this data by boosting or conquesting. It’s called Upzing so if I were to guess I think they were thinking like Search Sync and wanting to offer brands a way to bid up when their ads were airing. On their website though, the H1 is “Conquest Your Competitor’s TV Ads”. So, I think they’ve spoken to enough brands and basically people are interested in the schedules of when their competitors are airing commercials.
For the paid search side, I think the fundamentals are the same as Search Sync. Conquesting may be a good test for some brands but ultimately the juice is probably not worth the squeeze, especially now that most bidding strategies are automated and bid adjustments would disrupt the algorithm.
Paid social is a totally different discussion. I believe as of airing of this episode this feature is still being finalized but they do have plans of applying this technology to paid social campaigns. Theoretically, I agree that if someone is on Facebook while watching TV they probably need a nudge to view a brand's site. The intent is just not strong enough for this person to switch apps and view a mobile site. I still don’t really agree that this is a good use of budget though. I think if someone is not paying attention to the TV screen then you’re not really boosting anything.
As a quick tangent, if anyone wants to build tech related to tv ads, one thing that I can benefit from is being able to add a movie title to a list of things to watch. I have seen the trailer of a movie that I really want to watch but can’t remember what that is now.
Anyways, moving on.
There have been attempts to get viewers to take action based on tv ads, whether linear or CTV, but nothing is quite catching on. Other attempts to drive action from CTV specifically would include driving users in-store or tracking app revenue. Both of these are pretty impressive but then we get into questions like “is CTV the best channel to drive users in-store?” You may be able to drive them to your physical store but will that visit result in revenue? This discussion just gets very long and tedious. If you think about CTV as an awareness driving channel, then to immediately expect it to become a conversion generating one might be quite the leap.
As a consumer, you’re probably familiar with the ‘Skip Ad’ button on YouTube ads. These are skippable in-stream ads being served by a TrueView for Action campaign, which is now becoming Video action campaigns. In May 2021, YouTube announced an additional interactivity feature on Brand Extensions, specifically for TV viewing. You may still not have noticed, but chances are you have, that there is a ‘Send to Phone’ button next to these ‘Skip Ad’ buttons now. This button allows you to send the ad to your phone and browse that brand’s site, ultimately giving you a much more seamless experience to make a purchase or take whatever other action you can on that site.
This feature is now giving CTV advertising a leg up because it makes this tactic a much more trackable ad format, with a much more measurable impact to revenue. Of course, YouTube is only one of the content providers and considering that you need to be connected to the Google ecosystem for this to work reduces it to be the mainstream solution to connect screens to devices.
The 60-second commercial that served as the debut of a cryptocurrency exchange into Super Bowl advertising is now sending waves into the digital marketing landscape. This is, of course, Coinbase.
There was already chatter about using QR codes in TV ads, whether linear or connected. Coinbase had the boldness to be the first to use QR codes on TV in front of such a wide audience. This really did a lot for them in terms of further building their reputation. They’re not only a progressive product and company, they are now the most progressive.
Their ad really showed how much users connect with commercials, even on tv screens. It was met with such engagement that their app crashed because of all the people scanning. Techcrunch is reporting that app downloads for Coinbase grew 309% WoW, despite the app crashing. The following day app downloads were still growing, jumping another 286%. This is quite the successful proof of concept.
Sharethough, which is an SSP or supply side platform, was so excited about this that they released their CTV Dynamic QR Codes product the next day. OK, well I don’t know that they built it overnight but they definitely hyped it up the following day. They have basically successfully made impulse buying from TV ads possible. This is not even their core offering. As an SSP, they support publishers but they’ve also been building technology to support advertisers.
With Google leading the way to make video ads more interactive and measurable, and technologies like Sharethrough democratizing this connectivity, the outlook of TV advertising will only accelerate and the landscape will become even more dynamic.