Use of Funds

I suppose there ought to be at least one post on here about the Super Bowl this year, and the legendary advertising bonanza associated with it. Every year, it seems, the cost per second of television advertising during the big game rises, until you have a situation where each second of each ad is costing tens of thousands of dollars – before we even consider the cost of the ads themselves. This leads to an equally traditional question about whether this is really the best use of those funds. Which brings it into my area of expertise…

The first thing to keep in mind about any kind of television advertising is that, unless you are a very large company with an ad budget going well into 8 or 9 figures, it’s going to suck down a huge amount of your available funds. The cost of the airtime is often prohibitive all by itself, and if the ad you plan to show isn’t good enough (e.g. up to professional production standards), the results are likely to be counterproductive (e.g. something that will drive away business instead of attracting it). To combat this, a lot of small businesses will attempt to make their own ads using personal video equipment or hiring family and friends to help generate the content. Unless your friends and relatives include professional filmmakers or animators, however, this is unlikely to help.

Many small businesses will elect to purchase airtime on local television stations only, as opposed to national broadcasts, reasoning that since their operations are purely local, there is no need to display their ads outside of their local area. Some companies will take this strategy to its logical conclusion, and purchase airtime only on cable television systems in neighborhoods where their operations are located. This is generally even cheaper than local broadcast airtime, and has the added advantage of allowing the advertising company to select channels that appeal to the same demographic that contains most of their customers. For example, here in the South Bay our local cooking store, called “Cookin’ Stuff” runs frequent ads on the Food Network. Another good example was a local pizza company that ran its ads only on local cable sports networks, and only at times when people watching sports might be hungry (e.g. lunchtime, dinnertime, and late in the evening).

Of course, the fact that these ads are run in a small broadcast area during specific times of day does not eliminate the need for good content. The Cookin’ Stuff ad is a fairly simple collection of footage of the store and the intriguing gear available for sale, but it features a good professional voice-over and good camera work. The pizza place mostly ran shots of their menu items, but they also produced an amusing ad showing a man watching sports television while his girlfriend tries to get his attention; talking to him, standing in front of him, even performing as a belly dancer, all to no avail. Then she has a pizza delivered from the company in the ad, and the man immediately abandons the television and falls to eating. I’m not sure how well that would have played with a female demographic, but since the ad was targeted at men (18 to 36), it wasn’t much of an issue.

So when will your company be ready to advertise during the Super Bowl? When the amount of business you can reasonably expect to gain because of the ad exceeds the amount you will spend on the content and the airtime, of course – the same as any other form of advertising. Anything else is simply a very flashy way of spending money you do not have available. However impressive and prestigious a Super Bowl ad might be, the fact is that even the very largest advertisers don’t make back the cost of such ads, and for a small business, a short spot on right after the local news might be a better use of funds…