In 2000, a 30-Second Ad During the Super Bowl Cost

question 279

Multiple Choice

In 2000, a 30-second ad during the Super Bowl cost $2.1 million. By 2019, the cost had more than doubled to $5.25 million for a 30-second spot. The most likely reason for the escalating cost is that

• A) the number of TV viewers of the Super Bowl has become very large.
• B) the ads are much more elaborate and therefore more expensive to produce.
• C) the NFL knows advertisers will pay anything it wants.
• D) the ad agencies have dramatically increased their creative and production fees.
• E) the companies that create Super Bowl ads do not have to run any other ads all year.

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Definitions:

Differentiated Products

Goods or services that are distinct from those offered by competitors, making them non-identical and typically appealing to different consumer preferences.

Contestable Market

A market where entry and exit are costless enough that companies face potential competition, leading to competitive pricing and behavior as if the market were competitive, even if it’s dominated by a few firms.

Market Entry

The strategy or process by which a company enters a new market.

Market Exit

The process of a company stopping its business operations or leaving a market, often due to unprofitability or strategic realignment.