Why The Dollars Are Actually The Greatest Show On Turf

Rumor has it, there is some sort of football competition happening in Atlanta this weekend.

We are mostly kidding about that. As PYMNTS is Boston-based, the company is, of course, excited to see Tom Brady take a shot at that sixth Super Bowl ring.

That aside, whatever drama goes down on the gridiron on Sunday (Feb. 3), the numbers put up by the players on the field will pale in comparison to the dollars that advertisers, sports enthusiasts, snack food aficionados and brands will put up, just so they can be part of America’s largest television viewing event. Last year, 103 million people tuned in to watch the Eagles beat the Patriots — and that was a weak year. In 2017, the Super Bowl drew 111 million sets of eyes.

While we don’t yet know how many people will tune in to watch the Pats’ third appearance in three years (and Tom Brady’s shot at that sixth Super Bowl ring), we can say with complete confidence that it will be a big spending weekend — for everyone.

The Price Of Airtime

The advertisements are such a signature part of the Super Bowl that there are people in the world who claim to tune in “just for the ads” — though, admittedly, there are probably fewer of these people, now that most of the ads can be seen in advance on YouTube.

However, for one of the prime spots during the most watched television event of the year, advertisers will be shelling out $5.25 million for 30 seconds of airtime. That is a new record — up from last year’s $5.2 million, and $1 million more than the cost to air a commercial during the 2014 Super Bowl. In the last decade, the cost of a 30-second spot has doubled, according to Nielsen Media Research, despite the fact that average viewership has declined.

Ad time during the first Super Bowl in 1967, incidentally, cost between $37,500 and $42,500 for 30 seconds, based on Nielsen’s numbers. That would buy considerably less than one second of airtime today — at today’s prices, one second of airtime would cost about $175,000.

However, brands are investing that $175,000 a second into more than just the ad itself, as the Super Bowl ad season is now a few weeks long, and often comes with a lot of fanfare and press releases announcing that an ad has dropped. People do watch — as of today, a minute-long Budweiser Super Bowl commercial has over 8 million views on YouTube. A PepsiCo-owned Doritos spot with Chance the Rapper and the Backstreet Boys already has over 2 million YouTube views.

Those figures will spike right after the game is over if past is prologue.

In fact, failing to get a Super Bowl ad can even be strategically advantageous. CBS rejected a proposed one-minute ad (that potentially would have cost over $10 million) from Acreage Holdings, a New York-based medical marijuana company. The network noted in a statement that, as a policy, it does not air cannabis-related advertising. However, the ad is up on YouTube and has gotten half a million views since CBS rejected it.

The Super Bowl’s Cashless Future

Earlier this week, Visa announced it would extend its collaboration with the NFL through 2025. The two brands first started working together in 2015. According to the latest release, building a fully cashless Super Bowl is among the goals on deck — someday.

“Over the years, we have evolved our relationship with the NFL from a sponsorship to a partnership that provides invaluable payment experiences for fans,” said Lynne Biggar, chief marketing and communications officer for Visa. “Looking ahead, we see a cashless future for NFL fans, where events, including future Super Bowls, are digital — creating a more secure and seamless payment environment for fans and concessionaires alike.”

Apart from the collaboration on cashless, Visa will continue to be the preferred payment method across all NFL events, including games, concessions and merchandise, and will continue to carve out unique benefits for cardholders via the relationship with the NFL.

As of 2019, it seems the two are working hard and getting a jump on that cashless Super Bowl vision. There will be more than 30 cashless concessionaires around the stadium at the big game this weekend. At NFL events and shops, there will be an MVP checkout lane that encourages cashless payment, whether it’s through a card or a wearable. The NFL said some of its commercial campaign stars will surprise guests as contactless payment pros and helping customers at the registers.

Mostly, according to Visa, the push toward cashless payments in the stadium is a matter of giving any sports fan what they really want: more time at the game.

“Football fans want to spend less time waiting in line and more time watching the action. Visa helps fans make every second count,” Visa said.

Luckily, for those of us who didn’t snag a ticket, the concession stand is also known as the kitchen, and snacks can be kept flowing to the central watching area. If the estimates are correct, they will be — in bulk.

Snack Time

While it might not spring immediately to mind, the Super Bowl is something of a shopping event for American consumers. According to data from the National Retail Federation (NRF), stores will bring in around $14.8 billion in sales related to the game, or around $81.30 per person. That is a slight pick-up in spending from last year when people spent $81.17 per person, but because fewer people are forecast to watch, the total income forecast is lower than last year’s $15.3 billion.

“You don’t have to be a football fan to celebrate the Super Bowl,” said NRF President and CEO Matthew Shay. “Whether it’s to see who wins, watch the halftime show and commercials, or just get together with friends, this is the biggest party since New Year’s Eve. Spending is expected to be at one [of] the highest levels we’ve seen. And retailers are ready, whether you need food, team jerseys, decorations or a new TV.”

The bulk of those funds will be spent on food, and the biggest spenders are those ages 35 to 44, who shell out an average $123.26 — while the least spending are adults over 65, who spend about $41 a person.

It is not imagination — the snack food is getting more expensive, or at least some of it. Among the foods that experience sales spikes in the week before the Super Bowl, according to Nielsen data, are frozen appetizers, canned chili, frozen chicken, hot sauce, dips, frozen pizza, tortilla chips and chicken wings. Some of those items definitely go up in price in relation to the Super Bowl.

The price of chicken wings increases about 7 percent for a week before the Super Bowl, according to Jayson Lusk, head of the Department of Agricultural Economics at Purdue University. After the game, the price falls 4 percent to 5 percent. Nevertheless, the National Chicken Council has estimated that fans will eat 1.38 billion chicken wings throughout Super Bowl weekend — and prices follow.

Also seeing a spike in demand, though a less pronounced spike in price, are avocados — the critical ingredient to many a guacamole served over the weekend. Avocado unit sales are 33 percent higher during the week leading up to the Super Bowl, and fall 48 percent in the week after the game, according Nielsen. All in all, about $60 million in avocados have been sold so far in the run-up to the game.

Produce marketer Avocados From Mexico said that avocado demand hit new highs this year ahead of the Super Bowl, increasing 20 percent from last year to 242 million pounds.

“We have a lot of fruit in the market right now; we’re very happy and it’s been a successful Super Bowl so far,” the company’s President Alvaro Luque told CNBC.

Food makes up the bulk of Super Bowl purchases, which is why grocery sellers will be competing all weekend with offers to draw in consumers. However, Walmart, the nation’s largest retailer by sales, isn’t just looking to woo with snacks. It is also reaching into Super Bowl shopper’s second-favorite category of spending: sports merchandise.

Recruiting A Ringer

A little less than a week before kickoff, Walmart announced a long-term partnership with Fanatics, one of the largest sellers of licensed sports apparel. The deal will see the two launch an eCommerce shop on Walmart.com: Fan Shop by Fanatics — which, as of this week, started selling “hundreds of thousands” of items from professional sports leagues, like jerseys, hats and collectibles, according to Walmart’s blog post on the subject.

“Today’s announcement of our partnership with Fanatics is part of this ongoing commitment to create unique, specialized experiences on Walmart.com that make it easier to find the items our customers (in this case, sports fans) are looking for,” wrote Eric O’Toole, general manager of Sports and Fitness at Walmart U.S. eCommerce.

The move comes as part of a wave of digital purchases and expansions that Walmart has made since its 2016 acquisition of Jet.com. Those investments have paid off — insofar as Walmart has seen its eCommerce sales grow consistently over the course of the last 24 months.

So far, digital efforts appear to be paying off. In the second quarter of 2018, Walmart sales grew their highest in over 10 years. In the most recently reported quarter, Walmart eCommerce sales grew 43 percent.

For Fanatics, partnering with a mass merchandiser is a way to reach the greatest swath of customers — and getting its items up while still in the supersized, Super Bowl shopping period was doubtlessly helpful on a strategic level.

The Super Bowl may not feel like a nearly $15 billion commerce day — something about the big game and all the chicken wings distracts us from the awareness of commerce we assume. However, in reality, it is “the big show” for a lot more people than the players on the field. For retailers, payment peeps and consumers, it is also “go-time,” albeit in a less public exhibition. The customers want to get all their game prep set, retailers want to sell it to them, and innovators, doing it right, make those transactions happen so smoothly that they are almost invisible.

It’s a tall order. Then again, so is winning the Super Bowl, yet someone manages every year.

We in Boston hope for it to be our sixth! Go Pats!