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Super Bowl Advertising: A Super Media Buy?

Posted in Advertising, Branding, Guest Bloggers, Marketing, Television

The Super Bowl is much more than a football game to determine a champion; it is a cultural phenomenon. One of the most important elements of Super Bowl Sunday isn’t the on the field action; it is the commercials on television during the breaks in the action. For companies that want to advertise during the game, it is quite costly to partake in this action. A 30 second spot during Super Bowl XLIV will cost $2.5-2.8 million. That figure only includes paying the television network for the time. It doesn’t include costs to produce the ad. The final cost for a 30 second Super Bowl ad could easily run $4 million +. With this in mind, there’s one glaring question. Is Super Bowl advertising worth the cost?

The answer to this question isn’t a simple and definitive yes or no. Advertising during the Super Bowl can raise brand awareness. It also can be used simply to remind a target market of the importance of a brand within a product category. Using an ad in this manner would reinforce existing brand beliefs and hopefully induce a desire to purchase. However, a Super Bowl advertisement can affect a company negatively if not executed correctly. The effectiveness of Super Bowl advertising depends on the perspective of the advertiser, a brand’s strategic objectives and other marketing mix elements.

One of the appealing elements of advertising during the Super Bowl is the fact that it consistently draws a significant audience. More than 90 million people in the United States have watched each of the last 4 Super Bowls. Every Super Bowl since Super Bowl XXVII in January 1993 has drawn at least 80 million viewers. This is noteworthy because television audiences have become far more fragmented over time. The proliferation of television networks with cable/satellite TV, video entertainment options such as video games and DVDs and the vast array of Internet content have been the primary causes of audience fragmentation. The Super Bowl has been one of the few television programs that has been relatively unscathed by audience fragmentation. As a result, the network broadcasting the game (CBS this year) can charge premium pricing for advertising.

This year, one major advertiser made news by walking away from Super Bowl advertising. After 23 straight years of advertising during the game, Pepsi decided not to advertise during the Super Bowl this year. Instead of advertising during the Super Bowl, Pepsi will focus its advertising spending in social media and Internet marketing. There were many who felt that Pepsi’s decision to forsake Super Bowl advertising is a sign that social media advertising is more relevant than television advertising. This is incorrect and short sighted analysis. Pepsi’s decision is not part of a larger trend at the moment. Other brands in the PepsiCo portfolio will be advertising during the game. Additionally, soft drink category rival Dr. Pepper will advertise during the game. Pepsi’s decision appears to be based on what the brand managers perceive as the right direction for the brand. This event underscores the importance of the perspective of the advertiser and a brand’s strategic objectives.

Generally speaking, Anheuser-Busch is a company that has effectively used Super Bowl advertising for the Budweiser and Bud Light brands. It appears as though company executives feel the same way, as they have perennially advertised during the game. Over the years, they have produced numerous memorable and humorous ads (see here, here and here). With regard to Super Bowl advertising, it appears as though Anheuser Busch’s objective is to remind their target market about the importance of their brands. These ads may not drive revenue growth, but they can enable top-of-mind awareness. However, this may be changing. In 2009, it didn’t appear that Budweiser and Bud Light got a quality return on investment from spending $311.8 million on Super Bowl ads. Shipments of Bud Light fell by 2.5 percent and Budweiser shipments fell 9.5 percent. As a means of comparison, US beer sales fell by 2 percent. Anheuser-Busch plans to buy as much time for this Super Bowl as last year’s game, so it seems like the company believes for now that Super Bowl advertising is integral to the success of Budweiser and Bud Light.

GoDaddy.com is an example of a company that has effectively used Super Bowl commercials to build brand awareness. GoDaddy’s first foray into Super Bowl advertising was 5 years ago with this commercial. They have advertised on the game every year since then with equally salacious commercials, such as this one from last year’s game. However, the success of GoDaddy can not be solely attributed to their Super Bowl ads, even though they promote brand awareness and recall successfully. They offer a product that is desirable (domain name registration) at a reasonable price, creating a strong price/value proposition in the eyes of their target market, showing that other elements of the marketing mix can affect how effective a Super Bowl ad will be.

Other dot coms were not nearly as successful with Super Bowl advertising as GoDaddy has been. Computer.com and Pets.com are examples of this. Both of these companies were amongst the failed dot com companies of the late 1990s/early 2000s. These companies did not fail solely because of their Super Bowl ads (see here and here). These companies, and many other dot coms, failed because they had unsustainable business models. No amount of advertising, no matter how well done it is, can save a company if other elements of the marketing mix are askew.

Subaru is another company that had a disastrous Super Bowl advertising experiment. In 1993, Subaru advertised during the Super Bowl to promote the new Impreza model. Subaru has always been a niche brand that has done well in US states with unforgiving winters because of its all wheel drive system. This feature allows drivers to be able to handle harsh conditions without having to sacrifice the performance of a car or fuel economy as compared to an SUV. Because Subaru hadn’t been as big of a player as Toyota, Chevy or Ford in the 1993 auto market, they didn’t have as big of an ad budget. They paid for 30 seconds of ad space in two 15 second commercials (here and here) Although the commercials did point out aspects of Subaru’s superiority, they didn’t resonate well. Unfortunately for Subaru, they spent the year’s entire ad budget on those ads. This was clearly a case a misaligned strategic objectives. Subaru has learned from their 1993 experience. For 2010, Subaru has announced that they will air ads during the Puppy Bowl on Animal Planet. It looks like Subaru has gotten all elements of the marketing mix, as they expanded market share in 2009, defying the recession and outperforming their competitors.

With Super Bowl ads being so costly, it is the branding equivalent of a high stakes poker game. Many brands want to get in on this high stakes action, as CBS had sold out all of its ad space by February 1st. Super Bowl advertising can be effective for a company if it raises brand awareness. It can be effective if it reinforces existing brand beliefs about established brands, fostering top-of-mind awareness and recall. A brand should not rely upon Super Bowl advertising to grow sales. Sales growth can happen as a result, but only if other elements of the marketing mix are in place and it fits the strategic objectives of the brand.

David Mitchel, Norton Mitchel Marketing