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22 February 2024

Tough times for ad market


Yesterday when Americans settled down in front of their televisions to watch American football's Super Bowl, many were hoping to put their worries about the fumbling US economy on hold. But it was really hard.

The reminders were everywhere, including on the screen in the form of the Super Bowl ads, which rival the game for entertainment value.

Although companies had stumped up a record $3 million (Dh11m) for 30-second Super Bowl ad slots, the ads reflect the woes of the US economy. Gone were American car manufacturers like General Motors, Ford and Chrysler; in were Japanese and German cars, like Honda, Toyota and Audi.

Federal Express did not run an ad this year, and had said "specifically that it is an economic issue," said David Shoffner, a spokesman for Pavone, the advertising company that since 2004 has hosted the Spotbowl.com website on which Super Bowl-watchers can vote for their favourite ad.

Cost-cutting measures, including a 20 per cent salary cut for Federal Express Chief Executive Officer Frederick Smith and a hiring freeze, have been put into effect at the shipping company which is struggling with what Smith has called "some of the worst economic conditions in our 35-year operating history."

Taking out a $3m ad would not have sat well with those measures, even if the commercials reach a huge audience.

"The way a lot of companies justify paying $3m for an ad is by saying – look at the numbers. The viewership of the game compared to the investment is relatively low compared to other advertising opportunities," said Shoffner. "Take the Oscars: you pay less for the Oscars but you are actually paying more per viewer than during the Super Bowl."

A 30-second television ad in the Academy Awards in 2007 cost $1.67m – about one-third less than the same spot in the Superbowl. Forty million people watched the Oscars that year, less than half the 90-million-plus who watched the Super Bowl.

Last year, a record 97.5 million people in the United States switched on their tellies on Super Bowl Sunday to watch the New York Giants beat the New England Patriots. It was the third year in a row that the game's US TV audience exceeded 90 million viewers. Around the world, an estimated one billion people watched last year's championship game, according to the National Football League.

Half of those who watch the Super Bowl in the United States tune in specifically for the adverts, according to a report in Advertising Age in 2005.

Nearly six in 10 Super Bowl viewers say they talk about the ads at work the day after the game, while fewer than half talk about the game, a survey published in Advertising Age showed.

"Even in 2009, facing the worst economic mess in almost 80 years and at a cost of $100,000 per second for commercial time, the Super Bowl is proving to be attractive to advertisers for two simple reasons," John Lord, a professor of marketing at Saint Joseph's University in Philadelphia, said.

"The game still delivers the biggest audience any advertiser can reach in one fell swoop and the association with America's biggest sporting event puts your brand or company in a positive context," he said.

That could be one reason why Cash4Gold, which buys jewellery from Americans who are strapped for dollars and then melts down the precious metal and sells it on, had taken out an ad in this year's Super Bowl.

Cash4Gold's Super Bowl debut ad features two well-known Americans – Ed McMahon, who for years was the sidekick to the popular late-night talk show host Johnnie Carson, and MC Hammer, the musician behind U Can't touch this and other hits – who have fallen on hard times.

McMahon faced foreclosure on his California house last year and Hammer filed for bankruptcy in 1996.

Cash4Gold's business doubled last year compared with the previous year as Americans sold off the family jewels to try to stave off financial ruin.

"The Cash4Gold ad is a sign of the times," said Shoffner. "It would be a little tacky in any Super Bowl but it is especially tacky with the way the economy is."