NBC Cancels Shared Super Bowl Spot to Keep Prices High

(MoneyWatch)  NBC nixed an idea to have a single Super Bowl spot shared by multiple advertisers. The idea, floated by agency Cesario Migliozzi, was to buy a single spot in the big game and then divide it into eight mini-spots of a few seconds each. Each slot would be bought by a different advertiser, and the whole would form 30 seconds of extremely fast messaging. But according to Adweek and AgencySpy, NBC has called the deal off and now CM is threatening to sue. Says AgencySpy:

Reasons for NBC's decision to pull out of the deal (and negate it as a possibility) are speculative at best.

Well, no, not really. NBC killed this idea over the simple economics of pricing.

NBC is essentially selling airtime, a commodity in the U.S., which has hundreds of cable and satellite channels before you even start looking at radio and the internet. NBC's problem, therefore, is how to keep prices high in a commodified market where competition should drive prices down. The solution is to restrict supply.

CM's move to buy the time and resell it essentially does the opposite of that: It commodifies the airtime and opens it up in small chunks to many smaller advertisers. By removing the branded sheen of the Super Bowl, CM was essentially revealing the spot for what it was -- a commodity product that happened to be sitting in front of a large TV audience (worth between $2.5 million and $3 million per 30 seconds).

To allow that to happen would put NBC in the position of competing on price for its own airtime with every media-buying agency who booked a slot. As the original supplier, NBC would run the risk of selling the airtime below its maximum value -- and thus be in the position of leaving money on the table. (NBC's reward would be getting a guaranteed price -- resellers would run the risk of not being able to sell the inventory they bought.)

So, naturally, NBC put a stop to this plan. Two other things emerge:

1. This was a great publicity stunt for CM.
2. As BNET predicted back on Dec. 17, the Super Bowl continues to shape up as the most boring Super Bowl for advertising, ever.

• For more of BNET's coverage of ad agency pricing issues:
• WPP's In-House Commercial Production Shop Courts Controversy With Clients
• Levi's Asks for Transparency and Media Buyers Balk