News yesterday that NBC has certain advertisers willing to pay a record price of up to $6.5 million for a 2022 Super Bowl spot, 18% higher than this year, and that it has fewer than five unsold 30-second spots remaining for February’s big game, brought to mind a newsletter I wrote way back in February, 2006 entitled “The $10 Million Super Bowl Ad?” (Unfortunately link no longer available). In it I asserted that Super Bowl ads would eventually command $10 million.

For reference, back in 2007 NBC sold spots in Super Bowl LXI for $2.5 million apiece. That means the price per spot has grown by an annual compounded rate of approximately 6.5%. That is 3.5x the rate of inflation over that 15 year period, which was approximately 1.9%. If Super Bowl ad rates continue to increase at an average of 6.5% per year, then the price will hit $10 million per spot in about 7 years, for the 2029 big game.

(Note, back in 2015, when NBC was charging $4.5 million per Super Bowl spot, NBC Sports Group’s EVP of Sales and Marketing Seth Winter said “$4.5 million is a steal. We think the Super Bowl is worth closer to $10 million in incremental exposure for marketers.” Worth it or not, 6 years later NBC believes a spot is now valued by the market at $6.5 million and to be fair some of the ads’ value is tied to a packaging approach NBC is taking with the 2022 Winter Olympics).

What’s going on here?

Anytime the price of anything goes up by over triple the rate of inflation, there is something extremely noteworthy happening. That is certainly the case with Super Bowl ads, especially keeping in mind that the 2021 Super Bowl drew the lowest audience since 2007. I very much agree with Winter about the overall value of a Super Bowl ad, and as I wrote back in 2006, broadband (and now social, brand-building and soon conversion/attribution) are completely re-writing the rules of how a Super Bowl spot should be valued.

The biggest core driver of Super Bowls ads’ value increase is expanded reach: in the current era, with Super Bowl ads widely distributed online and in social, a game ad is seen by a multiple of the number of people who would have seen it 15 years ago, let alone 25 or 30 years ago. For example, Amazon’s “Alexa’s Body” ad originally ran during this year’s game that attracted 96.4 million viewers (the number of people who actually saw the ad due to bathroom breaks, party conversation, food runs, etc, is obviously far smaller). But since the game, there have been another 78.3 million on-demand views of the ad just on Amazon’s YouTube channel by people who proactively searched for or were passed the link. So the Alexa ad probably doubled or more its paid reach during the game. That’s huge.

But as I tried to explain all those years ago, while expanded reach is the most tangible multiplier of Super Bowl ads’ value, the brand-building benefits, while more intangible, are at least as important. When everyone is talking Monday morning at the physical or virtual water cooler (social media) about an ad and the product, with positive association, that’s pure gold to an advertiser. This is just part of the reason Super Bowl advertisers labor so hard over their big game creative. The biggest creative winner in modern Super Bowl times was Volkswagen’s “The Force” which had hundreds of millions of YouTube views, and inexplicably is no longer available on Volkswagen’s official YouTube channel (though it’s re-posted in lots of other places on YouTube along with many parodies).

Reach and brand-building have been big drivers of Super Bowl ads’ value to date. But in my view, the biggest potential multiplier of value really hasn’t yet even kicked in: the ability for advertisers to convert viewers to take action directly from the Super Bowl ad. This is the “full-funnel” capability being enabled by connected TVs which I wrote about extensively last November in “Connected TV’s Big Opportunity at the Bottom of the Funnel,” and a couple of months ago in “The Connected TV Advertising Flywheel is Here, and It’s Only Going to Accelerate.”

Going beyond $10 million per Super Bowl ad?

Because CTV advertising is built on a digital platform, TV advertisers can combine all of the best of digital (e.g. creative optimization, targeting, attribution, conversion, etc.) with the best of TV advertising’s sight, sound and motion. As advertisers come to realize that their Super Bowl ads can directly drive inquiries, leads, purchases, SVOD sign-ups or any other KPI they can imagine, the cost of all CTV ads will increase accordingly. But Super Bowl ads will increase the most because the Super Bowl will (likely) always command the biggest audience. The potential for viewer engagement and to drive KPIs from that huge audience is going to be incredibly tantalizing to advertisers. The TV networks will be able to ring the cash register over and over again as CTV’s conversion capability is proven in.

Of course, a lot of things have to fall into place for the concept of CTV advertising as a completely full funnel marketing channel to become fully realized. And as we all know, nothing happens overnight. But there is a tremendous amount of energy throughout the industry being directed toward this vision. And if the past is any precedent, we’ll eventually get there. The $10 million Super Bowl Ad is well within reach, likely in the next 5 years. Perhaps the more appropriate question to now ask is how high - and over what time period - might Super Bowl rates actually go once CTVs' full capabilities kick in?