Article header

Money & the World

The Real Super Bowl LI Battle Is Between Canada and America

For the first time in history, Canadians will be able to watch the U.S. broadcast. Here's why we're putting our new ad on the Canadian broadcast anyway.

The year 2017 will be a historic one for people who want to watch a Clydesdale and a puppy fall in love for the express commercial purposes of the Anheuser-Busch corporation. Because for the first time ever, Canadians will be able to watch American Super Bowl advertisements. It’s an event that kind of blew the collective minds of the advertising class. Canadian companies started to wonder: Will their ads get the same views? Will most Canadians tune in to the American broadcast so they don’t miss an Amazon Echo shaming Dan Marino? We are particularly interested this year, since we’ve made a Super Bowl ad that we’re especially proud of.

Last year, we explained why Super Bowl advertising in Canada was, counterintuitively, one of the best deals around. This year, we’re explaining why we think it still is.

Here's How it Used to Work##

American programming often gets broadcast in Canada—especially for Canadians who happen to live near America. When those American broadcasts happen to feature the exact same content as a Canadian broadcast, like on game day, the cable company, which sells its ads in Canada, does something nifty. It replaces the American ad with a Canadian ad, so that instead of the Denny’s commercial in the American broadcast, Canadians see a Tim Hortons ad. The practice is called simultaneous substitution—or “sim-sub” in ad-nerd patois—and it started because American stations were situating themselves close to the border to target Canadian viewers and earn money advertising to them.

The practice of selling those replacement ads earns Canada’s broadcasting system about $250 million annually, and a lot of that money comes from American advertisers who have to pay Canadian cable companies to reach Canadian viewers. Without sim-sub, American advertisers would have little incentive to buy ad spots in the Canadian broadcasts.

This is how it used to work with the Super Bowl.

Here's How it's Working this Year##

This year there will be no substitution. The CRTC—the Canadian Radio-television and Telecommunications Commission, which governs Canadian media—has decided that Super Bowl ads are an “integral part of the event.” Basically, they decided that the ads are the event and so shouldn’t be subbed out. After all, lots of people watch the Super Bowl expressly for the ads, and Canadians felt they were missing out. This change means that while CTV will broadcast the game this year as usual, Canadian viewers who have the option of watching a local American Fox affiliate will be able to watch the American ads unhindered. Only Canadians who live near the border will be able to watch the American ads, of course. So, not a big deal, right? How many Canadians actually live close enough to the border to have a local Fox affiliate? A lot, in fact, considering that 75% of Canadians live within 100 miles of the border. In Toronto, viewers will be able to choose between the CTV broadcast and the Fox broadcast from Buffalo.

Which is why there has been a big media fight. Bell Media, a behemoth that runs most of Canada’s major channels, bought exclusive rights to broadcast the Super Bowl in Canada for an undisclosed but certainly gargantuan sum. And seeing that Fox’s American incursion will cost them money, they appealed the CRTC’s decision. Bell Media does, after all, have a binding contract with the NFL through 2019, and it was negotiated long before American advertisers invaded (with hundreds of dachshunds in hot-dog costumes leading the charge). The way advertising works is that broadcasters sell time to companies with a guarantee of viewership. So if viewership of the Canadian broadcast drops precipitously and Bell doesn’t meet its promises, they’ll have to compensate advertisers by offering additional inventory—basically, they’ll have to run free ads on other programming to make up the difference.

Canadians Want to Watch American Super Bowl Ads. But They're Also Proud to be Canadian.##

Part of the reason that the CRTC changed the rules is to please their constituents. Canadian viewers want to see American Super Bowl ads, which are considered to be, well, the Super Bowl of the advertising world. Some Canadians wanted to see the American ads so badly that they hopped onto the CRTC website and lodged an official complaint. And according to the last available tally of those complaints, 20% of those made about commercials referred in particular to the Super Bowl. Namely: Hey, you’re not letting us watch all the cool ads! And it’s true that Americans spend more money on their Super Bowl ads than we do. “It’s a matter of scale,” said Jamie Greenberg of Facet4 Media, a company specializing in Canadian media. “In Canada, you have 10% of the population, so you have a considerably smaller market to advertise for, so the scale of the ads is usually lower—really by a factor of 10.” That’s right: one-tenth the budget, one-tenth the puppies.

The CRTC listened to the complaints. Why? Greenberg thinks it’s because it was a rare opportunity to actually respond to the people: “The CRTC gets a lot of complaints where it doesn’t have jurisdiction. ‘Someone said a bad word on TV!’ They can’t really do much about that. But when a lot of the complaints concerned one thing that it could regulate, the CRTC decided that it would.” If your kid asks for a pony nine times a day, when he asks for a hamster, he’s got a shot.

Canadians are Torn Between Love of Country and Love of Apple Commercials##

The response the decision has elicited seems to be equal parts patriotism and strong interest in Charlotte McKinney. When the news broke, we collected some sample comments:

“Couldn't care less about that particular piece of overhyped American cultural gaudiness,” commented Dave Villeneuve on Huffington Post.

“Personally, I would like to ban all American media content for our own. I like Americans; I just don't want to be brainwashed to live like one,” said Bill Rice on Huffington Post.

“Let's see the American commercials and have the entire experience rather than just the 50% our overlords might, for their own greedy purposes, prefer,” commented Mike Smith on CBC.

“Canadians watch a large portion of American ads anyway. It just happens that the Super Bowl is the behemoth of ads and Bell thinks we want to watch the same silly Canadian commercials we ignore the other 364 days of the year,” said Greg Anderson on CBC.

Beyond the comments section of Huffington Post, the decision to let American ads play has brewed discontent in some unlikely sectors. In a letter to Canada’s ambassador in Washington, D.C., Florida senator Marco Rubio expressed his displeasure by arguing, a little dramatically, that trouble in the relationship between the NFL and Bell Media may ultimately undermine U.S.–Canadian relations. Rubio suggested that the CRTC is devaluing the Super Bowl, a hallowed American tradition, in the eyes of Canadian citizens and advertisers. The move, he wrote, “sends a troubling signal about the value Canada places on its largest trading partner, best customer, and close friend.” That’s right. Charlotte McKinney biting into a Carl’s Jr. burger is an act of war.

So Now it's Totally Dumb to Advertise on the Canadian Broadcast, Right?##

Well, we at Wealthsimple looked into it, and we don’t think so. The Super Bowl is a huge deal in Canada. In the past five years, the Super Bowl has beat out the Oscars, the Stanley Cup, and the Grey Cup in size of viewership. Last year we learned that a higher percentage of Canadians watch the Super Bowl than Americans, and that held true in 2016: 8.3 million viewers tuned in.

We still believe that Super Bowl ads in Canada are an enormous value, whether or not people are curious about the American broadcast, too. Super Bowl ads in Canada cost between $150,000 and $200,000 for 60 seconds. Consider that this year Fox sold 30-second Super Bowl spots for no less than $5 million. We don’t think the numbers will fall off — we think Canadian viewers will still watch the CTV broadcast because a lot of people watch CTV. But even if the numbers erode a little bit, the value is still on the side of the Canadian broadcast – last year we calculated that you get 2.4 times as many viewers in Canada as you do in America for every dollar spent.

Which isn’t to say we won’t be tuning in to Super Bowl ad highlights on YouTube the next day. We will. But it’ll mostly to be watching our own ad, which we humbly think is as good as anything broadcast from south of the border.

Wealthsimple uses technology and smart, friendly humans to help you grow and manage your money. Invest, save, trade, and even do your taxes in a better, simpler way.

Money + the World

"BURNOUT HAS BECOME OUR BASE TEMPERATURE. WE’RE THE BURNOUT GENERATION."

Anne Helen Petersen explains how things are different for the generation the world seems to love to hate.

subscribe

Get the best stories from our magazine every month

Sign up for our email newsletter

  • Money & the World

    Most of Our Clients are Men. We Wanted to Figure Out the Problem.

    We took a hard look at our clients, and people like them throughout Canada, to investigate the problem of women, investing, and the great Canadian wealth gap.

  • Money & the World

    A Money Conversation with Insurgent Presidential Candidate Andrew Yang

    Yang’s candidacy has taken off in a way almost no one predicted. And at the center of it is an unconventional economic idea: universal basic income.

  • Money & the World

    A Deep (But Not TOO Deep) Explanation of What We Mean by 'Diversification'

    Maybe you know that everyone's investments should be diversified, but... well, maybe you don't really know what diversification is. Or how it works. Here's an easy guide.

  • Money & the World

    What’s the Best Way to Put Your Tax Refund to Work?

    What to do with a refund? We used our deeply scientific formula to calculate the joy different investments (or savings plans) will bring over time. Hint: don't buy a hot tub.

  • Money & the World

    Dumb Questions for Smart People: Ep. 1: How Hedge Funds Warp Our World

    Sheelah Kolhatkar — the New Yorker staff writer and author of “Black Edge” — explains billionaires, insider trading, and how hedge funds affect everyone.

  • Money & the World

    History of Finance Proves: Your “Gut” is Mostly Wrong

    Your gut tells you to buy when you're feeling good about the market and to sell when you're not. Your gut is wrong. Here's why long-term investing works.

  • Money & the World

    Prediction: The Predictions Will Be Wrong

    We are going to reveal whether people think the stock market will go up or down! And also what that information is actually good for.

  • Money & the World

    What Does Warren Buffett's $1m Bet Have to Do With Your Wealthsimple Account?

    Ten years ago, Warren Buffett bet that passive investing would beat sophisticated hedge funds. He just won. Here’s how that can help you be a better investor.

Meet Wealthsimple

Get rich slow

Powerful financial tools to help you grow and manage your money. Get started now.

Learn moreright arrow icon

Our best stories, once a month.

Sign up for our newsletter

browse by category

Wealthsimple Magazine tells compelling, thoughtful, and unique stories about money through the lens of local, creative, and influential people.

The content on this site is produced by Wealthsimple Technologies Inc. and is for informational purposes only. The content is not intended to be investment advice or any other kind of professional advice. Before taking any action based on this content you should consult a professional. We do not endorse any third parties referenced on this site. When you invest, your money is at risk and it is possible that you may lose some or all of your investment. Past performance is not a guarantee of future results. Historical returns, hypothetical returns, expected returns and images included in this content are for illustrative purposes only. By using this website, you accept our (Terms of Use) and (Privacy Policy). Copyright 2020 Wealthsimple Technologies Inc.

;