The Rising Costs of Super Bowl Ads in One Chart

USA Today reports:

The Super Bowl is the, well, Super Bowl of advertising. The telecast reliably reaches more than 100 million sets of U.S. eyeballs every year, and advertisers can't pass up the chance to influence that many people. Those huge audiences are so enticing that brands beat down the door to advertise during the game despite the exorbitant costs. How much? Well... 

That's the cost of 30 seconds of Super Bowl ad time every year since 1967, adjusted for inflation using the BLS's CPI inflation calculator. As you can see, the cost has outpaced inflation by more than a factor of 10 since the first Super Bowl - a trend likely to continue if reports of Fox getting $4 million per 30-second spot this year are accurate.

NOTE: I am not buying that USA Today has completely adjusted for inflation (or that it even should). They are using the consumer price index to adjust. The type of advertising going on at the Super Bowl is, to an important degree, more of a long-term capital investment--not all but a lot. As Austrian Business Cycle Theory teaches, central bank money printing does not hit the entire economy at the same time. It hits the capital goods sector first, which is why the stock market and real estate, both capital goods sectors, tend to lead the economy on the downside during Fed money printing slowdowns known as recessions. Indeed, USA Today admits that Super Bowl ads fall in price during recessions, which supports the idea that the ads have a capital investment aspect to them. USA Today writes (my highlight)

Sure, there are occasional dips in the adjusted cost from year-to-year (those tend to follow recessions or astronomical one-year increases in cost, such as from 1999-2000). 

That said, I don't think the increases are all the result of money printing. I suspect there is both a cyclical and secular aspect to the price increases. There's a certain cache about having a Super Bowl ad and it does reach a widespread demographic.

(ht Chris Rossini)