Opinions

What Else Could $4 Million Buy?

Posted by Peter Vogel on February 5th, 2014 at 11:24 am

$4 million is a big chunk of moola for brands to invest in a 30-second Super Bowl ad, but admittedly, there is hype around the Super Bowl like nothings else.

Budweiser’s “Puppy Love” has been watched on YouTube more than 37 million times in the last five days. During the game 110 million Americans watched Fox’s telecast and almost 25 million tweets have been sent about the game and half-time show. And, today the front page on many media outlets is plastered with stories about the hottest ads, especially since the game turned out to be a blowout.

But when the dust settles and all the social media views, Facebook Likes and tweets are counted, do the $4 million, 30 second ads actually lead to sales?

What does $4 Million really get you?

Traditionally it’s been tough to tie TV or Internet ads to actual sales. An emerging advertising channel – Card-Linked Offers – has presented advertisers with a new opportunity to actually track offline sales and determine if an ad is actually driving sales.

Card-Linked Offers are the offers and special deals you may see advertised on your online bank account, for example offering $10 cash-back if you spend $50 at a grocery store. These deals are tied to your bank account or credit card account and are becoming more and more popular with consumers and advertisers alike. To earn the reward or cash-back a consumer simply has to remember to use a specific credit card – this is how the brands are able to track that a purchase was made and then how they can give consumers a reward after the purchase is made.

Banks ranging from Bank of America, Capital One and MasterCard are offering consumers these cash-back or reward offers and consumers are automatically presented with these deals either in emails or on the banks’ web sites. There are also a variety of new independent stand-alone reward programs that offer consumers the ability to link the credit card of their choice and be eligible to receive even more special rewards, discounts or cash-back.

Advertisers typically then pay just a percentage of the total sales generated (just like online performance-based or affiliate marketing). Online marketers have paid for advertising like this for more than a decade, but the offline model has just recently become popular with consumers and brands alike.

For brands with physical locations, it's an attractive model, because they only pay for actual sales. Fast food restaurants would typically pay five percent of sales that is driven by a partner, while a sit-down fast-casual or more formal restaurant might pay 7.5 to 10 percent of sales.  A clothing retailer might pay between 10 and 12 percent of total sales a partner can drive.

Consumers find this model attractive because they can earn rewards, or cash back just for remembering to use a specific credit card. They don’t need to carry around any coupons, apply for a new loyalty cards or remember any codes. Simply pay with your linked card and you get rewards.

So what could Super Bowl advertisers have purchased for $4 Million?

H&M made a splash with a shirtless David Beckham, but had they used the $4 million to drive in store sales, at a 7.5 percent commission on in-store sales, they could have sold more than 1.5 million pairs of Pajama Pants from Beckhams’s Bodywear line ($34.95 each).

Although Papa John’s didn’t advertise directly during the Super Bowl, pizza advertisers have always had a large role in the big game. Pizza Hut sponsored much of the pre-game show and we know Papa John’s hitched its wagon to Peyton Manning a while ago. For $4 million, they could sell a heck of a lot pies. At a 7.5 percent commission, Papa John’s could sell 7.6 million medium pizzas. When stacked on top of each other, that’s 634,920 feet of dough, cheese, sauce and toppings or the height of 597 Eiffel Towers worth of delivered Super Bowl sustenance (Current Special – 3 Medium Pizzas with 3 Toppings for $21)!

Radio Shack, whose 80’s themed makeover ad was one of the best, would likely pay a five percent commission on sales of its electronic goodies. For $4 million, Radio Shack could sell close to eight million cell phone chargers (Samsung Cell phone charger - $9.96).

Subway, home of the highly advertised $5 foot-long, would probably pay a five percent commission to motivate in-store sales. For $4 million, Subway could motivate customers to buy 16 million foot-long subs – that’s 3,030 miles of sub sandwiches, enough to stretch from Seattle to New York, when laid end-to-end.

These are dramatic examples but help demonstrate the power of a type of advertising where every dollar spent is tied directly to sales. This type of advertising is not intended to be a branding vehicle, to drive tweets, Likes or any social media exposure at all – it’s 100 percent designed to drive sales.

What’s Next?

This channel is just beginning to grow – it’s estimated that $3 billion in purchases were motivated by Card-Linked Offers in 2013 and based on insights from industry insiders and other collected data, we expect to see more than $5 billion in purchases tied to Card-Linked Offers in 2014.

One Response to “What Else Could $4 Million Buy?”

  1. Lisa says:

    Ummmmm, so what happened to plink than?!?!?

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