KPBS's Amita Sharma and BottomLine Marketing co-founder and SDSU marketing lecturer Miro Copic discuss some of the week’s top business stories.
Q: The coronavirus outbreak in China remains a big story this week. It's not just a health story. How is this also a serious issue for the economy?
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A: It's a little too early to tell, but it's going to have a substantial impact. The World Health Organization has declared it an international emergency. The State Department last night gave a travel advisory for U.S. citizens not to travel to or from China. Countries like Italy have prohibited flights. The stock market closed 400 points down on Monday. Today, it just closed over 600 points down. There's a lot of turmoil. There's a lot of confusion. And if you look at the United States, we have will have ripple effects. Our fourth-quarter GDP was announced a 2.1%. It's a fairly low growth rate, even though we have a very good labor market and low unemployment.
And because a lot of our goods and services are with China and other parts of the world are in services, if there is this kind of lockdown, our service sector is going to be impacted. That's 85% of the national economy is the service sector. So the United States is going to watch what's going on this week. The Fed met and they held interest rates. If the world economy starts to tank, the Fed is going to have to act in the next quarter
Q: Let's turn now to the Super Bowl, the biggest day of the year for advertising. What does it cost to be part of this year's event?
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A: Much more fun topic. The Super Bowl is what I would call the Academy Awards of the advertising world because people are really interested in seeing the ads as part of the game experience. So advertisers are going to spend a lot of money. They're going to spend between $5 and $5.6 million for a 30-second commercial. That's pretty consistent to what it was last year, maybe a little bit more. But the difference this year to last year are the NFL ratings, which took a beating in last year. And so they didn't sell out the inventory until the very, very last minute just before the Super Bowl game. This year, the NFL ratings were much higher. They sold out in December. So there's a lot of other companies that want to promote the Super Bowl and they're getting into the pre-game show in those spots are now selling for about $3 million.
So what's going to happen this year in this year's Super Bowl? You know, advertisers not only are spending on the ad itself, but they have to spend in the commercial. So that commercial is going to cost generally on average for Super Bowl spots a million dollars. And if you like that new Hyundai ad for the self-driving car, that's going to be in the multiple millions cause you're paying endorser fees. And then now because you want to get people to know your ad is coming, these ads are being released days in advance. There is a social media campaign for it. There's other marketing that builds momentum and gets people to react after they see the ad in the game. So if you want to think about it, an average Super Bowl ad is going to be supported by at least another 5-plus million dollars in other marketing spending. That's why only big advertisers go into these games.
One last thing is we're gonna see political ads. There's going to be an ad from the Trump campaign and an ad from the Bloomberg campaign. My prediction? For most people, this is an opportunity to get people together and have a good time. Politics really has no place in this. And, you know, usually, there's a ranking of ads. This one, I think they're not going to be ranked very high. They're gonna be looking to be entertained and want to buy products and services.
