The revelation that CBS has already sold 70 percent of its ad inventory for the 2010 Super Bowl reveals two key points: on the one hand, CBS' (CBS) sales represent fairly brisk demand given the recession and the dismal state of the advertising industry. On the other hand, the bookings have slipped behind the pace set by NBC at this time last year, when the Peacock had sold 80 percent of its ad space for the game.
Even so, pricing for 30-second spots may be on par with last year's spots, which sold for $2.4 million to $3 million. According to Advertising Age, CBS' prices for the top ad spots range from $2.5 million to $3 million. These strong prices aren't surprising: despite the weak ad environment, Super Bowl advertising should outpace the rest of the television industry. After all, it's one of the biggest draws on television today.
In an era of media fragmentation, the Super Bowl is one of the few consistent broadcasts that can capture a majority of the U.S. television audience. This year's Super Bowl, in which the Pittsburgh Steelers were victorious over the Arizona Cardinals, drew 95.4 million viewers, making the broadcast the third-most watched telecast in television history.
Such a huge audience translates into a unique opportunity: a Super Bowl commercial has the potential to massively boost a company's prospects, as in the case of Apple's (AAPL) Orwellian "1984" ad. On the other hand, a bad commercial -- like the notorious Just for Feet ad -- can massively damage a company's bottom line.
With this in mind, many advertisers recognize that the chance to have their spots seen by record-breaking audiences is often too good to pass up, even at prices that may reach $3 million. As Hyundai spokesman Chris Hosford noted, the car maker is currently in negotiations for two commercial spots in the broadcast. He wouldn't comment on pricing.
So whether it's a glass half-full or half-empty for CBS, one thing won't change for the 2010 Super Bowl broadcast: it'll continue to be prime real estate for marketers.
Introduction to Value Investing
Are you the next Warren Buffett?View Course »