During my last posting I took a look at the audience levels for the Academy Awards since 1974. Since I had the data handy I decided to compare the viewing trends to the Superbowl.

It’s fascinating to see how the audience levels have diverged. Although slightly more popular in 1974, the Superbowl now attracts more than double the audience of the Oscars. Perhaps this is a reflection of the diminishing value of the Oscars, now that there are more opportunities now to see celebrities and movie stars, be it through other awards telecasts, multiple magazines, specialty cable channels and hundreds of web sites.

I was also interested in comparing the relative ad pricing between the two events, especially since it was recently reported in Mediapost that there has been some discounting and special packages offered for advertising in this year’s Oscars. Comparing the ad prices between the two events since 1983, the CPM per household was relatively similar until the last three years.

Last year a 30-second national spot in the Oscars cost $1.8 million and had an effective CPM of approximately $86. This year the prices for a national spot have dropped to $1.4 million. If the broadcast maintains the same ratings, it will have an effective CPM of $66, 23% lower than last year but still higher than the mid 50′s CPM for the Superbowl. Perhaps certain clients will opt to pay more for certain female or upper-income segments that more commonly tune into the Oscars rather than the Superbowl.

UPDATE: The Oscars averaged 36.3 million viewers, well above my predicition and much higher than the audience of 32 million last year. More on this later.

Superbowl XLIII is less than five days away and I am looking forward more to the commercials than the game itself . A Superbowl commercial has be better than the game since it has only 30 seconds to grab a viewer’s attention and be as memorable as any play or touchdown that occurs between breaks. This year advertisers will be paying around $3 million for the privilege to air their messages. How did the price get this high and what is it really worth?

The Superbowl is considered by advertisers be ‘super’ since it manages to draw the mass audience of yesteryear, and it’s still growing. Last year’s Superbowl XLII between the New York Giants and the New England Patriots yielded a record audience of over 97 million television viewers.

While the Superbowl audience size has grown, advertising prices have risen at a higher rate. Adjusted for inflation the cost of a 30 second spot has risen 795% between 1968 to 2008. The biggest single annual jump has been 42.5% (in 1985) but overall the greatest growth was seen during the late 90′s, probably an aftermath of the networks’ competitive bidding for the NFL broadcast rights that were then up for renewal. This began in 1993 when fledgling Fox snatched the broadcast rights from CBS with a $1.58 billion bid for four years. CBS then came back in 1998 offering $4 billion for the AFC games, while Fox paid $4.4 for the NFC, which then effectively shut NBC out of the NFL and ended that network’s 59 year broadcast history with the sport. Not until 2006 did NBC get back in the game, by gaining the rights to the Sunday night game, which has subsequently improved its Sunday night ratings. This bidding war demonstrates the power of not just the Superbowl, but of the entire NFL schedule.

But getting back to the Superbowl, the reason that advertising prices are so high, and the reason that network vie to broadcast the event, is that it’s a unique platform to reach a concentrated audience simultaneously. It’s been shown that Superbowl viewers pay more attention to commercials aired during the event. According to this TNS study, viewers pay attention during the Superbowl at an index level of 100, while the average primetime show has a level of 90. Both advertisers and the networks understand these marketing benefits. Fox invested 44 minutes during last year’s Superbowl for network advertising, a new record. The event also affords a unique opportunity for advertisers to achieve a big splash in the marketplace. It is no wonder that between 20 and 25% of the Superbowl’s advertisers each year are first-time clients, who probably want to break out of the clutter.

Advertisers will pay premiums for such benefits, which can clearly be seen by the higher CPM (Cost per Mille) for the Superbowl. CPM or Cost per Thousand is an advertising measure often used to measure the relative performance between two media vehicles. The following graph measure the cost of reaching 1,000 homes, either by advertising in the Superbowl or on network primetime television.

The network primetime CPM figures comes from the TV Bureau of Advertising website, and take into account all broadcast networks including the WB, UPN and Univision. Therefore, it might be a little low and not be as different as the Superbowl CPM, which runs about twice as high. Given the benefits mentioned before, this CPM could therefore be comprehended. While it is difficult to judge whether the prices are worth it, the customers do seem the appreciate the opportunity and that says a lot.