🏈📺 Super Bowl Ads Cost How Much?!
Happy Wednesday all,
This coming weekend is President’s Day weekend - which means that the market is closed next Monday the 20th. If you’re working, I do hope you get that holiday off! According to Wikipedia, it’s the holiday to honor all those who served as presidents of the United States… so this holiday basically exists to honor 46 different people.
In personal news, I signed a lease to move to San Francisco (the city) and will start moving in slowly throughout the end of the month. Expect future videos after mid-March to have a new studio look, and perhaps even an apartment tour when it’s fully furnished. If you’re in San Francisco, send me an email! I would love to hear what you’re up to. We have a packed edition of Hump Days today, so… enjoy!
- Humphrey, Rickie & Tim
Tweet of the Week
Be sure to read the Hump Days Scoop (below) this week where we cover Super Bowl ad spending and how creators like Mr. Beast may flip the advertising game on its head.
The Weekly Brief
Inflation Persisted in January, CPI rises 6.4% from a year ago (CNBC)
Inflation rose by 0.5% for the month and 6.4% over the past 12 months, according to the U.S. Bureau of Labor Statistics on Tuesday. Both figures exceeded analyst expectations which came in at 0.4% and 6.2% respectively. Notable increases included shelter, food, gasoline, and natural gas. One item that came in exceedingly high was eggs, which increased 70.1% compared to last year.
Why Does it Matter?
The latest CPI reading showed "disinflation", where the pace of inflation cools, but the fact that the figures exceeded expectations showed that the Fed still has more to do to continue to slow the pace. One thing to be aware of is the concept of sticky prices, where prices that rose stay at that level for an extended period of time (or indefinitely). This will further put pressure on many households that try to stretch paychecks from one payday to the next.Euro Zone is Seen Dodging Recession as Energy Crunch Eases (Bloomberg)
European Union officials in Brussels raised their estimates for growth this year, predicting a 0.9% expansion, narrowly avoiding a recession. They cited a mild winter, high levels of gas storage to help ease the energy crisis, and the labor market holding up as key contributors to the expansion of the economy. The projection for consumer prices was also cut, though still relatively high at 5.6%.
Why Does it Matter?
The EU economy is in better shape than expected almost one year after Russia launched its war of aggression against Ukraine. It looks as though inflation has peaked and the energy markets seem to have become less volatile. Although, Economy Commissioner Gentiloni cautioned that Europeans still face a difficult period with growth slowing and inflation only easing gradually; "better than expected doesn't mean good".Biden Pledges to Not Let America Default on its Debt (Reuters)
President Joe Biden is putting pressure on Republicans to detail what budget cuts they are looking for in order to raise the federal debt limit. Biden is looking to increase the debt ceiling to cover spending and tax cuts that have already been approved by Congress. Republicans have not yet decided on a specific plan, though they said they will not try to scale back the two largest benefit programs, Social Security and Medicare.
Why Does it Matter?
Both sides say they will continue to talk but are refusing to concede ground. The White House said Biden will discuss spending cuts only after the debt ceiling is lifted, while Speaker Kevin McCarthy said Republicans will only lift the ceiling if Biden agrees to spending cuts. Not lifting the debt ceiling could result in the U.S.A. defaulting on its debt for the first time in history which would have ripple effects throughout the entire global economy. You’ll Find This Interesting
The founders behind Three Arrows Capital, the first major crypto firm to go bankrupt in 2022, have resurfaced with a $25M crypto-exchange venture that will let users trade bankruptcy claims from failed crypto companies, including their own.
You can’t make this up.
Hump Days Scoop
This year’s Super Bowl saw advertising rates topping $7M for a 30-second slot, a record. More than 113M viewers tuned in to watch the Kansas City Chiefs beat the Philadelphia Eagles in Super Bowl LVII, making it the third most-watched television show of all time, according to Adobe Analytics. With the decline in traditional television advertising, live sports remains a force that is able to capture the attention of millions around the world, increasing the premium that advertisers pay to get their brands in front of us. The attention economy is one that is always changing. Let’s fill you in on its current status.
How did the Super Bowl perform compared to other live television events?
As you read above, this year’s Super Bowl was the third most-watched television show of all time. That already says a lot about how well this year’s Super Bowl was able to draw in an audience but compared to other live events, the NFL’s premier event was an outlier. For example, awards shows have seen a steep decline in ratings in recent years, with the 2022 Oscars beating the previous year’s lows but still the second-worst in history. To put the Super Bowl’s numbers in perspective, the Oscars drew in 15M people compared to the NFL’s 113M.
Which industries did we see advertising from in the Super Bowl this year?
Unlike last year’s “Crypto Bowl” where we saw extravagant spending from the likes of FTX and Coinbase, this year’s Super Bowl featured no such companies. This year’s advertisements featured alcohol, gambling, and Jesus instead, along with the usual tech companies such as Google and Uber.
With Anheuser-Busch InBev (Bud Light, Michelob, Busch Light) giving up its long-running exclusive rights to promote alcohol during the game, competitors such as Crown Royal, Heineken, and Molson Coors, poured into the space for their Super Bowl appearances.
Hobby Lobby CEO along with a string of anonymous Christian donors funded a $20M, 90-second ad slot for their “He Gets Us” campaign promoting Christianity.
How much did Fox Corp. make in total Super Bowl advertising revenue?
Fox sold out of advertising last week, with some 30-second slots selling for more than $7M. There were some slots that sold for as low as $6M but those were reserved for advertisers with multiyear deals who were known to be big sports spenders. The average unit price was around $6.5M per 30-second slot. Fox Corp CEO Lachlan Murdoch said last week in an earnings call that the company expected to gross $600M in ad revenue.
How does advertising during live sports compare to other kinds of advertising campaigns?
More and more people are migrating away from traditional television and towards streaming services and social media. Advertising dollars follow where our collective attention is at so it makes sense that we’re seeing an influx of spending on platforms such as YouTube and TikTok that seem to have a massive grip on our attention at any given time. Live sports is the last major television event that is able to draw crowds in the 100M+ range so many advertisers are willing to cough up the premium they pay to get in front of that many people. Notably, we saw many advertisers choose to complement their ads with TikTok campaigns such as Kia, Pepsi, and Mr. Peanut. State Farm opted out of buying a Super Bowl ad completely for the second year in a row, in favor of a TikTok campaign.
An interesting comparison to be made is in the case of YouTube vs. Super Bowl. While the Super Bowl drew in 113M+, the 272 regular season games averaged 16.7M. On YouTube, Mr. Beast draws in 100M+ views, posting about 2 videos a month.
Per 1,000 views, the average cost on YouTube is around $5. Some creators make more, and some make less but the generally accepted standard is $5. With the Super Bowl drawing in 113M, and the average cost for a 30-second ad being $6.5M, an advertiser looking to promote during the Super Bowl is paying around $57 per thousand views, 11x more than what we’re seeing on YouTube.
If YouTube can consistently draw in those kinds of numbers, we may see advertisers pull money from traditional advertising and put it toward more contemporary ways of advertising such as on YouTube and TikTok.
What We’ve Been Reading
Markets
Economy
Government
Nikki Haley Starts GOP Presidential Bid with Focus on Winning South Carolina (WSJ)
Biden Will Name Fed’s Lael Brainard as His Top Economic Advisor (Bloomberg)
World
Chart of the Week
According to Commerce Department data, retail sales in the United States climbed by 3% in January, the largest gain in almost two years. The data, which have not been adjusted for inflation, indicate strong consumer demand, notably in the automobile, furniture, and restaurant industries, and might strengthen the Fed's willingness to raise interest rates.
Humphrey congrats on moving to town...I think. Ya never know how moving to a new town ends up. I gave up on regular TV a couple of years ago, and mostly only only watch several creators I enjoy on YouTube. This is bad news for me, on the bargain ad prices, as I'm sure more and more will appear over time. I have considered paying the extra $12 a month to go ad free, and will most likely go that way at some point. On a different note, I have decided to dump $37 K into a solar array finally for a couple of good reasons: I will be locked into the current rate of payback with PG&E, which is now attractive, but won't be starting April 15th. My power bills (all electric home) have skyrocketed to the $800+ per month range (with more increases ahead, I'm sure). My payback will be in less than 5 years, then I will be $800 + per month ahead for the rest of my life. This was a good ROI, I think. I normally just buy more rental property, but all property now is too expensive to get the ROI that I like. Love your stuff. Thank you. Terry