On Slate, Tim Noah claims that “buying commercial time on the Super Bowl is a waste of money!” His justification is that the cost per thousand viewers of the ads has tripled since 1970, a much greater increase than the price for ads on general network programming. As a result, it’s possible to reach up to 60% more adults 18-49 through a combination of ad buys than you can by paying for one Super Bowl ad.

But Noah misses the reason the Super Bowl is so important – tens of millions of people all watch the same show, including the ads. What that means is that you know other people watched the ads, and they know you know they watched it, and so forth. UCLA political scientist Michael Chwe has written an excellent paper (PDF) making this argument (which he extends in his book Rational Ritual). Chwe argues that ads on popular shows command a premium because they help solve a coordination game for advertisers of “social goods” – items like cars, sneakers and beer in which my preferences depend in part on what other people like. As a result, those companies pay extra for ads on popular shows.

This logic extends most strongly to the Super Bowl, which creates more common knowledge than any other TV event. As Chwe points out, it was completely logical that Apple debuted the Macintosh during the Super Bowl with its famous “1984” ad. You would only feel confident buying a Mac if you knew other people were going to do as well. And you can apply this same logic, for instance, to recent Monster.com Super Bowl ads; job seekers will only go to the firm’s website if firms are advertising on it, and vice versa. The ads help create the common knowledge necessary for the company to succeed.

Super Bowl advertising may be overpriced, but for producers of “social goods,” there’s just no substitute.