New England Patriots fans erupt as Seattle Seahawks’ Russell Wilson’s pass is intercepted at the goal line to ensure the New England Patriots win in Super W49.
Bob Berg | Moment Mobile | Getty Images
In a fragmented media landscape, events such as the Super Bowl are prized by advertisers for the exposure they provide.
More than 100 million people are expected to tune in this Sunday when the Philadelphia Eagles take on the Kansas City Chiefs. Many people watching sports will be just as attentive to commercials as they are to the action on the field. These commercials are an institution in themselves, with the commercials generating conversation for weeks and days following the big game. Consumers may remember the well-crafted Super Bowl commercials years after their debut.
But capturing those eyeballs comes at a heavy price. This year, companies are paying nearly $7 million for a 30-second spot — and that’s just for air time. On top of this the cost of hiring the talent needed to create the ads, and the cost adds up even more.
advertisers come and go
The value of that expense can be hotly debated. For companies selling beer, chips or cars, the game is often an annual ritual. But other advertisers may come and go.
This is certainly true for cryptocurrency companies who bought airtime last year. Crypto exchange FTX was praised for its ad, which starred comedian Larry David as a time-traveling skeptic, pooh-poohing inventions from the wheel to the light bulb. The commercial encouraged viewers not to be skeptical of cryptocurrency. “Don’t be like Larry,” it said.
Months later, it appears some suspicion was warranted. FTX, now bankrupt, has collapsed in a scandal that is being investigated by federal prosecutors.
So does Super Bowl exposure really help boost business? Judging by the share prices of the companies, 2022 has not been good for most.
Take coinbase, another cryptocurrency exchange. Its bouncing QR-code commercial was considered a wild success. It attracted so many visitors to Coinbase’s app that it crashed on Super Bowl night.
Coinbase stock is down 64% since that evening. And the company said it would not return for this year’s games.
super bowl advertising curse
| FactSet Universal Screening | ||||||||
|---|---|---|---|---|---|---|---|---|
| Sign | Name | Share Market | Sector/Industry | market value | Price change from 14/2/2022 | $ Lost/Made On Investing $10,000 | Above Average PT (%) | (%) buy rating |
| cvna | Caravan, Class A | NYSE | consumer cyclical | 2,645.8 | -90.0 | -9,000.0 | -23.4 | 11.1 |
| VRM | vroom | nasdaq | consumer cyclical | 163.0 | -82.9 | -8,290.0 | 13.7 | 0.0 |
| coin | Coinbase Global, Class A | nasdaq | finance | 15,760.5 | -64.4 | -6,440.0 | -5.0 | 26.7 |
| amcx | AMC Network, Class A | nasdaq | consumer service | 775.4 | -57.4 | -5,740.0 | 7.4 | 0.0 |
| FVRR | fiver international | NYSE | technology | 1,599.6 | -47.6 | -4,760.0 | -8.4 | 60.0 |
| Experience | Expedia Group | nasdaq | consumer service | 18,598.2 | -39.6 | -3,960.0 | 5.1 | 46.7 |
| MNDY | monday dot com | nasdaq | technology | 6,423.8 | -37.1 | -3,710.0 | 1.4 | 88.2 |
| For | Paramount Global Class B | nasdaq | consumer service | 14,696.1 | -36.0 | -3,600.0 | -14.9 | 24.1 |
| amzn | Amazon.Com | nasdaq | consumer non-cyclical | 1,025,238.0 | -35.5 | -3,550.0 | 32.3 | 76.8 |
| Alphabet, Class A | nasdaq | technology | 1,276,392.0 | -26.7 | -2,670.0 | 29.2 | 74.0 | |
| dkng | Draft Kings, Class A | nasdaq | consumer service | 14,875.7 | -20.4 | -2,040.0 | 13.9 | 48.4 |
| into | Yours | nasdaq | technology | 118,477.5 | -20.3 | -2,030.0 | 10.7 | 71.4 |
| crm | sales force | NYSE | technology | 169,630.0 | -17.8 | -1,780.0 | 6.7 | 66.7 |
| meta | Meta Platform, Class A | nasdaq | technology | 475,590.5 | -15.7 | -1,570.0 | 8.8 | 56.9 |
| GM | General Motors | NYSE | consumer cyclical | 57,975.1 | -14.1 | -1,410.0 | 11.2 | 54.2 |
| msft | Microsoft | nasdaq | technology | 1,985,486.0 | -9.6 | -960.0 | 5.1 | 72.5 |
| PLNT | Planet Fitness, Class A | NYSE | consumer service | 7,456.9 | -9.6 | -960.0 | 11.6 | 88.2 |
| nflx | Netflix | nasdaq | technology | 163,366.5 | -7.5 | -750.0 | -3.5 | 42.2 |
| bkng | booking holdings | nasdaq | consumer service | 94,067.4 | -4.7 | -470.0 | -2.0 | 50.0 |
| Passion | PepsiCo | nasdaq | consumer non-cyclical | 235,808.7 | 2.7 | 270.0 | 10.0 | 34.8 |
| K | kellogg | NYSE | consumer non-cyclical | 22,934.1 | 3.8 | 380.0 | 7.6 | 9.5 |
| wmt | walmart | NYSE | consumer non-cyclical | 378,145.3 | 4.7 | 470.0 | 13.9 | 54.8 |
| Yum | Yum! Brands | NYSE | consumer service | 37,019.4 | 8.3 | 830.0 | 7.2 | 33.3 |
| Tmus | T-Mobile US | nasdaq | Telecom | 178,921.8 | 14.6 | 1,460.0 | 22.9 | 75.8 |
| holks | Hologic | nasdaq | Health care | 21,107.5 | 21.8 | 2,180.0 | 3.3 | 38.1 |
Source: CNBC; factset
Shares of online auto dealers caravan And vroom Have done worse. Their shares are down 90% and about 83%, respectively. Neither will advertise during the game this year.
Of course, the steep decline of some of the last year’s advertisers speak wide market decline Last year, the worst fared with several tech names on the list.
‘Not a Good Look’
Deb Gabor, CEO and founder of Soul Marketing, said companies need to be mindful of the broader economy given the high cost of advertising during sports. For the most part, he said, citing toyota As an example, since the automaker is leaving the sport for the first time since 2017.
He said the list of advertisers this year is filled with snack food and liquor companies. “People need rest,” she said. “And snack food and booze is one place they’re going to find it.”
Gabor is looking at Bay Area tech companies working day close range. The maker of human resources software doesn’t seem like a natural fit for a flashy Super Bowl commercial, but it’s spending big on a 60-second spot that emphasizes how companies often treat their top employees like rock stars. She says Its ad is filled with music legends ranging from Ozzy Osbourne to Joan Jett and Kiss frontman Paul Stanley, among others.
Gabor said he’s not sure how Workday will leverage this multimillion-dollar spot beyond the Super Bowl. However, that said, the company has attracted some bad press because word of the commercial came out around the time it announced the plans. Cut about 3% of your workforce,
“It’s not a good look,” Gabor said.