Cost of ad during Super Bowl sets a record

30-second commercial to average $2.4 million

December 30, 2004|By BLOOMBERG NEWS

NEW YORK - News Corp.'s Fox television network is charging a record average of $2.4 million for advertisements on the Super Bowl in February, 6.7 percent more than last season's National Football League championship game.

Anheuser-Busch Cos., maker of Budweiser and Bud Lite beer, is buying 10 of the game's 58 30-second commercial spots at that price, said Tony Ponturo, vice president for global media and sports marketing at the St. Louis company.

The Feb. 6 Super Bowl could generate $139 million in revenue for Fox, based on that rate, and help the network boost sales as viewers spend more time on cable TV, the Internet and video games. The Super Bowl has been the best-rated TV show every year since 1995, giving advertisers an opportunity to appeal to a mass audience, Ponturo said.

"It's the brightest of bright lights," Ponturo said in a telephone interview. "The Super Bowl always draws giant ratings in this fractionalized market."

Jon Nesvig, Fox's president of sales, declined to comment on the price for the ads.

Fox, the fourth-ranked network in audience ratings, had sold about 90 percent of its Super Bowl ads as of Tuesday, said Karen McCallum, a media buyer at McKee Wallwork Henderson in Albuquerque, N.M. McCallum said she has negotiated ad purchases for clients she declined to identify.

News Corp.'s television unit, which includes Fox, company-owned TV stations, and the STAR TV network in China, accounted for 19 percent of the parent's $5.19 billion in revenue in the quarter that ended Sept. 30.

PepsiCo Inc. and Visa International also are buying Super Bowl advertisements, McCallum said. Closely held GoDaddy.com, an Internet domain-name registration company, is among companies that will advertise during the broadcast for the first time, she said.

The Super Bowl's average ad price will probably rise as game day approaches because advertisers may be willing to pay more for scarce spots, Ponturo said.

The broadcast rotates between Viacom Inc.'s CBS, Fox and Walt Disney Co.'s ABC. The 2006 game, to be played in Detroit, will be on ABC.

Super Bowl ad prices have risen each year since the 2002 game, when lower demand for advertising after the Sept. 11 terrorist attacks cut the price 4.8 percent to $2 million from a year earlier.

In 2003, the price rose 5 percent to $2.1 million for commercials on ABC's broadcast. CBS charged $2.25 million, a 7 percent increase, for spots on the 2004 game between the New England Patriots and the Carolina Panthers in February.

The 2004 program drew the highest Super Bowl audience ratings since 2000, with 41.4 percent of the 108.4 million U.S. households with televisions tuning in.

The NFL is completing the seventh year of an eight-year, $17.6 billion contract with Fox, CBS and ABC and Disney's ESPN cable channel to broadcast football. Fox is paying $550 million a year for its portion of the agreement to broadcast games.

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