According to Nielsen, about 90 million people watch the Super Bowl every year and it is fair to say that advertisers have a captive audience based on the hyper Super Bowl commercials receive. Iâ€™ll admit that I did not fast-forward past any commercials until the second half of this yearâ€™s Super Bowl. When one watches Super Bowl commercials, one expects to be entertained. But, at a cost of $3.01M (USD) per 30 second spot â€“ what are advertisers hoping to get out of all of it?
Product Life Cycle Basics
The product life cycle describes the natural progression of a product throughout its lifetime; from the time that it is introduced â€“ to the time it becomes obsolete or unprofitable and is pulled. In sequential order, the product life cycle progresses as follows: Introduction, Growth, Maturity, and Saturation and Decline. The roles of marketing and advertising change at each stage of the product life cycle.
In the first two phases the producers of a product are very concerned about using marketing and advertising to get the message out about their new product. They want to hit their target markets and they want to inform those markets about the benefits of using their product. As a product becomes mature its producers will need to differentiate it from its competition. They may try to do this by introducing new features or appealing to a particular segment of their target market, a niche. At the saturation and decline phase a productâ€™s producer may look to spread into emerging markets domestically or abroad in order to start the product life cycle all over again. If they cannot do this successfully and the product does not live up to a certain level of profitability â€“ the product â€œdies.â€
What to make of Super Bowl Commercials?
For producer of a new product, using a Super Bowl commercial as a way to raise awareness for your product would be great if you happened to have $3.01M to drop on ad space and another $1M to produce a worthy commercial. This is not a realistic aspiration for young companies or companies that have invested millions in research and development developing a new product. As such, many Super Bowl ads are by large established producers â€“ firms that have mature products.
The goal of these ads, according to basic marketing principles, should be to differentiate by appealing to a niche or introducing new features to your mature product. Some examples of this include the ads produced by Anheuser Busch (AB) and Godaddy.com. AB has been making beer since before 1860 and has been the largest brewer in the US for the last 52 years. Their product, beer, is a mature product. To differentiate, AB has introduced seemingly endless features to their beer. Their latest creation, Bud Light Golden Wheat, is, by virtue of its name, is an attempt to promote the features of a micro-brew in a mass produced light beer. Raise your hand if you saw at least 5 commercials about Golden Wheat during the Super Bowl. Supposing 5 is all there was (there may have been more) AB spent $15M trying to differentiate its mature product from competitors like Miller.
Another example of a mature product using Super Bowl to differentiate itself is Godaddy.com. Godaddy.com is a cheap place to register and host your domain name and website. They chose to differentiate by charging at a niche. Judging from the nature of their ads they are trying to appeal to a niche of webmasters that might be somewhat new or inexperienced â€“ perhaps ones that do not place a premium on the finer aspects of web hosting. If youâ€™re going to register your domain name at a place where women rip off their clothes in front of Danica Patrick, you probably donâ€™t care about things like security or customer service.
How effective are these ads? By choice, I do not buy anything from either of the firms mentioned above â€“ so I will leave it up to their patrons and bottom lines to judge.
My opinion is that new products are the ones that can benefit the most from Super Bowl advertising. For example, if Apple needed to get word out about the iPad (notice I said if), the Super Bowl probably would have been a great investment. But, the use of millions of dollars to pursue shrinking and evasive target markets and niche is a big time gamble.