If you are a company whose product or product that you distribute is in high demand you can slightly alter the price higher nd higher each year to keep up with inflation and nobody will really notice or care.
The coffee shop that my wife and I get coffee at before we go on weekend trips has raise the price of a coffee a dime every year or so to keep up with their own expenses. It’s something that we enjoy, and COLA increases basically give us the dime anyway so it’s no big deal.
Now, what does this have to do with the Super Bowl commercials? Well, every single year, along with inflation and demand the price of a commercial during a very coveted time slot the price of a Super Bowl commercial has gone up.
Then of course you had the NFL alienate a significant portion of the viewing audience. You know what that means? It means that you have advertisers who are going to pay less per ad because they are reaching fewer people.
If you’re looking at the modest ratings rebound the NFL earned this year, you might reasonably conclude that the NFL’s television woes are behind them. However, if you’re looking what’s happened to the NFL’s Super Bowl ad prices for this year, you might come to a very different conclusion.
After years of steady increases, Super Bowl ad prices for 2019 have stalled.
According to Bloomberg:
CBS Corp., which will broadcast the big game from Atlanta on Feb. 3, is selling 30-second commercials for $5.1 million to $5.3 million, people familiar with the matter said. That’s roughly the same price as last year, when Comcast Corp.’s NBC sold them for $5.24 million, according to research firm Kantar Media.
The Super Bowl is still the most-watched TV event of the year — and the biggest advertising showcase — but the audience peaked in 2015. Last year’s game drew 103.4 million viewers, the fewest in nine years. Prices for commercials may now be reflecting those realities.
Super Bowl ad prices had steadily increased over the past decade, in some years making huge leaps. Between 2012 and 2013, the price went up $500,000, according to Kantar Media. It jumped $400,000 between 2015 and 2016. Now Super Bowl ad prices “seem to be peaking,” Bloomberg Intelligence analyst Geetha Ranganathan said in a note Thursday.
Though, as Bloomberg also notes, the NFL has not lost many of its Super Bowl advertisers. CBS has nearly sold all of its advertising inventory for the big game, over 90% has been sold with one full week remaining before kickoff. However, should advertising rates remain stagnant, the NFL will suffer their worst ad pricing performance since 2010.