Yes, by 1983 the Super Friends had become so associated with Saturday Mornings that they were natural pitch men (and women) for cereal. I guess because there were no new episodes of Super Friends that year, the heroes had some free time to shill cereal.
I am not sure what villain ended up being the winner of the "Create a Villain Contest" but this commercial was probably best known for being the onscreen debut of the JSA villain Icicle. Are Alpha Bits even still around? Now if you will excuse me, I think I am going to get me a bowl of Fruity Pebbles.