What makes the price for an advertisement during the Super Bowl so different from the normal price for a television advertisement?

2.3 Super Bowl Forum

Let’s take another look at how all this works together, using a well-known event as our point of reference:
Supply, Demand, and the Cost of Super Bowl Advertising

During 364 days out of the year, the average cost of a 30-second prime time television advertisement spot is a little over $100,000. But for one four-hour block, on one day, on one channel each year, the price skyrockets to around $3.5 million. That time slot is the Super Bowl.

Like most prices in a market economy, the price for television advertising is set by supply and demand. Advertisers want to reach the largest number of viewers with each ad, so demand is high for ad space during a program lots of people are watching. Few programs are watched by more people than the Super Bowl, which averages over 100 million viewers each year.

When demand is high, the supplier (in this case the television network airing the game) can raise its prices as high as buyers (advertisers) are willing to go. The limited supply of ad space also plays a role in sending the price higher. In 2013 there were only 70 slots available to sell.

In the end, all of the ad space available during the game is filled, because the television network will not charge a price so high that advertisers are unwilling to pay. They charge the price that makes them the most money, while leaving no surplus airtime.

Focus Questions

Each student will answer all three questions about Super Bowl advertising in the forum. Then they will respond to one other student’s posts. Use the Guidelines for Responding to Another Student (opens in a new window) to prepare your two replies.

  1. What makes the price for an advertisement during the Super Bowl so different from the normal price for a television advertisement?
  2. Do you think pricing for Super Bowl advertising is fair? Explain your reasoning.
  3. Think of an advertisement from a recent Super Bowl that you recall (or select one from the resources below). Explain how it was effective, or not. Do you think sales for the advertised product increased after the Super Bowl?

Your discussions will be graded according to the rubric (scoring guide) below.

Resources

Best Commercials from Super Bowl 2017, CNN (opens in a new window)

Super Bowl Commercials 2017, SB Nation (opens in a new window)

2017 Super Bowl Commercials, CBSSports (opens in a new window)

Guidelines for Participating in a Forum

When you are posting in the discussion board, your comments and your first and last name will be visible to the whole class. Do not post anything offensive, vulgar, or inappropriate for a normal classroom environment. Remember, your name is attached to anything that you write. Do not specifically use other peoples’ names, situations, or personal information in your posts. The purpose of an academic forum is to increase discussion and understanding of the topics that we are working on in this course. Please encourage this behavior by refraining from any negative or otherwise aggressive or negative posts.

· Please do NOT post/upload any content (images, URLs, etc.) that do not pertain to the topic of discussion. If any questionable content is in a post/forum, the instructor may remove the content. Further disciplinary action may taken.

· Please do type your responses/replies on a document and copy and paste it in the text box when you are ready to submit, because Moodle can “time out” if you are on the page for too long without entering and saving your work. If you are in the process of doing a forum and Moodle times out, you will lose your work.

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