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Good Companies Buy Super Bowl Ads, Bad Companies Buy Oscar Ads

Published: February 26, 2008

Author: David Rodnitzky

Last year I wrote about the well-propagated myth that over 1 billion people watch the Oscars. Today’s ratings numbers show that the billion viewer is way off the mark: US viewership of the Oscars this year came in at 32 million viewers, the lowest number ever. So unless 970 million people outside the US happened to be watching, the real number of viewers was probably less than 100 million.

To make matters worse, many viewers who did watch probably Tivo’d the show, skipping the inane awards like “Best Animated Short Film” or “Best Sound Editing.” Indeed, I myself watched “Locked Up” while Tivoing the Oscars and I was able to reduce the entire Oscar experience down to about 25 minutes (no commercials, few actual awards, mostly just watching Jon Stewart’s monologues).

Let’s face it, movies aren’t as all-important as they once were, TV viewership is down, Internet usage is up, and Tivo makes all TV advertising questionable at best. These facts, however, have apparently not deterred advertisers from spending $1.6 million for a 30 second spot this year. That’s right $1.6 million for the privilege of having 32 million viewers mostly not watch your ad. And at $.50 a click, you could have instead purchased 3.2 million quality search engine clicks, or at least bought a text link on the Yahoo homepage every day for about a month and a half!

Warren Buffet allegedly said “When my Grandmother tells me to invest in a stock, I know it’s time to sell.” I wonder if a similar argument could be made for Oscar advertisers: “Any company that advertises during the Oscars is a good pick to sell short.”

On the flip side, buying Super Bowl ads might be a good investment. This year’s price of a Super Bowl ad was $2.7 million, or about 75% more than an Oscar ad. There are two big differences between a Super Bowl ad and an Oscar ad though. Difference number one is the sheer amount of traffic. This year’s Super Bowl had a record 97 million Americans watching – more than three times the traffic of the Oscars. Prorated, that means that Super Bowl advertisers paid about $27.80 for 1000 viewers (cost per thousand, or CPM), versus $50 per 1000 viewers for the Oscars.

Worse still, Super Bowl ads have become a part of American culture. People use Tivo to go back and watch their favorite ads again, rather than skip through them entirely. Pundits write thousands of post-Super Bowl columns dissecting each ad. In a sense, the Super Bowl is the last vestige of TV advertising where the ads still matter.

So compare a $50 CPM for an Oscar ad that no one watches versus $27.80 CPM for an ad that could become a part of American culture and the choice is clear. Now don’t get me wrong – I still believe that companies that spend significantly on TV advertising and don’t have an equal or stronger commitment to online are mainly dinosaurs waiting to go extinct. But I suppose in the paleontological sense, Oscars advertisers may be T-rexes and Super Bowl advertisers may be Wooly Mammoths – at least the Mammoths made it to the Ice Age.

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