Does The Super Bowl Create Super Sponsorship Spending?

            Many people watch the Super Bowl for two reasons – to see the on-field drama and to laugh at the television commercials. In fact, the media coverage around Super Bowl commercials seems to receive nearly as much attention as the game itself. For example, there are thousands of newspaper, magazine, blog, and television stories evaluating which company had the best commercial. In addition, companies’ entire annual marketing campaigns can be geared around a single Super Bowl Commercial. This includes creating additional activation elements around commercials, such as Facebook pages, microsites, coupons, and promotions.

            As an increasing amount of attention is focused on Super Bowl television commercials, an increasing amount of scrutiny has been placed on their return on investment (ROI). More specifically, does it make sense for any company to spend $4 million on a 30-second commercial – the going rate for an ad during this year’s game? On the surface, this type of investment does make sense. The Super Bowl’s domestic viewing audience has grown by 26 percent over the past 10 years, with audience levels expected to exceed 110 million viewers. In addition, Super Bowl commercials have become “event viewing,” with a significant portion of the audience paying full attention to the content of advertisers’ messages. Having this large and engaged audience is a rarity for any other type of television content.   

            For many companies that can afford this type of marketing expense, however, the Super Bowl may not deliver a tangible ROI for the significant cost. As noted, commercials are often judged on likability. Nielsen completed a study both on the “Best Liked” and “Most Remembered” Super Bowl Commercials. While there was overlap between the two categories, many times the “Best Liked” were not the “Most Remembered,” and vice a versa. One of the most interesting findings is that four different car companies had four of the top ten “Best Liked” commercials. Yet none of them were rated in the top ten “Most Remembered.” If a commercial is well-liked, but is not remembered, then does it make an impact? Also, some commercials are not well-liked but are still the “Most Remembered.” $4 million seems like a hefty price tag for a company to negatively impact its brand.

            Still another problem with Super Bowl commercials is their supposed appeal for advertisers – the gargantuan size of the audience. A company’s engaging a large audience does not always correlate with engaging its target demographics. One of the car companies with one of the “Best Liked” and “Most Remembered” commercials, Audi provides a good example of this issue. . For Audi, targeting sports fans makes sense because sports fans make more money and have higher levels of education than the average population. Yet the Super Bowl is much more likely to attract non-sports fans than the average sporting event, resulting in Audi squandering a significant amount of advertising money not reaching its targeted demographic.

            Still companies looking to increase brand awareness among customers will likely benefit most from producing a Super Bowl spot. The most famous example is Apple’s ‘1984’-inspired commercial for the Super Bowl in the same year. Apple generated significant increases in brand awareness and perception during a time when it was trying to reach a large audience and differentiate itself from IBM. A more recent example of a company using the Super Bowl to increase its brand awareness is GoDaddy.com. The company spent $2.4 million – its entire marketing budget – on a single commercial during the first quarter of Super Bowl XXXIX. GoDaddy’s primary product is selling domain names (Block Six Analytics purchased the www.blocksixanalytics.com from GoDaddy). The Super Bowl advertisement allowed GoDaddy to introduce and differentiate itself to a large number of customers in a commoditized space, as many companies at the time sold domain names. GoDaddy’s CEO has often credited this Super Bowl ad as one of the main catalyst’s for the company’s success.

            Both Apple and GoDaddy showed that companies that need to increase brand awareness can receive a significant ROI from their Super Bowl spend. Yet these are not the types of companies that generally purchase commercials. In fact, many well-known companies use Super Bowl commercials to increase brand awareness when they seemingly do not need to (i.e. Doritos and Pepsi) or wind up targeting customers not in their target demographic (i.e. Audi). 

            Block Six Analytics Corporate Asset Valuation Model does allow companies to evaluate their sponsorship spend for all sporting events, including the Super Bowl. The primary goal of our model is to show how sports organizations can drive new revenue and achieve corporate partnership goals. We evaluate three different categories: initiative, demographics, and channels. With regards to Super Bowl commercials,     most activation occurs in one channel – television. Companies can use the Corporate Asset Valuation Model to see if they are receiving value by increasing brand awareness and/or reaching their target demographics viewing the commercials.  

Doctor, Doctor Give Me The News

            From the perspective of Washington Redskins fans, coaches, and players, today marked the end of the most difficult stretch of an otherwise largely positive 2012-13 season. This year’s team winning its first NFC East Division Title since the 1999-00 season has been marred by the torn lateral cruciate ligament (LCL) and anterior cruciate ligament (ACL) suffered by Robert Griffin III in last Sunday’s playoff game versus the Seattle Seahawks. The team’s star quarterback had strained his LCL after a devastating hit during a game against the Baltimore Ravens in early December. After missing a game against the Cleveland Browns, Griffin started and helped the team win its final two regular season contests. Yet, it was clear Griffin’s knee prevented him from dynamic, athletic playmaker that made him a candidate for both the NFL’s Most Valuable Player (MVP) and Rookie of the Year awards.

            Only three days after collapsing on the ground at Fedex Field, Griffin had surgery to repair his LCL and ACL. Yet, the blame game for who was at fault for the injury started much more quickly. Many media members and fans criticized coach Mike Shanahan for keeping Griffin in the playoff game and not playing backup quarterback Kirk Cousins, who led the Redskins to a convincing victory against the Browns in his only career start. Some wonder why Griffin either did not revealing the extent of his injuries to the coaching staff or failing to remove himself from the game when knew he was injured.

              And others blame Dr. James Andrews. Arguably the most famous and revered sports orthopedic surgeon in the world, Andrews has been standing on the team’s sideline as the team’s medical consultant during for regular season games since before Griffin first injured his knee. Recent reports have surfaced, however, that Andrews had not orally communicated with Shanahan about Griffin’s knee injury during the Ravens game (instead giving him a “Hi” wave to indicate Griffin was OK). The day before the Seahawks game, Andrews was quoted as saying he had been a “nervous wreck” watching Griffin play since he first injured his knee. Many have wondered why Andrews had not been more forceful in recommending that Griffin not play if he thought there was a good chance the quarterback could re-injure his knee.

            From a Block Six Analytics perspective, determining whom to blame for Griffin’s injury is not the goal of the post. Instead, we hope that Griffin’s injury does not also lead to a potentially bigger loss in player development and on-the field performance management. The Redskins actually did take an innovative step in hiring Dr. Andrews as a medical consultant. Despite paying athletes millions of dollars to compete for their team, many sports organizations do not invest nearly as much in having best medical personnel to take care of its players. For the same amount of money as the average salary professional athlete makes in the NFL, NBA, MLB, or NHL, sports organizations could hire the top medical specialist in virtually any field. Having players return to the field more quickly by having the best medical care possible would seem to provide a distinct competitive advantage as compared to compensating an average player.

            This logic does not simply apply to the medical space. As B6A has discussed before, on and off the field analytics has become one of the hottest topics in the sports industry. Yet, it is still uncommon for sports organizations to hire leading economists, data miners, or statisticians to evaluate performance data. Again, sports organizations can hire these professionals at a fraction of the cost of signing a star or average player. As Bill James, the statistician largely credited with coming up with the performance metrics highlighted in Moneyball, stated, “You can get 100 guys like me for what you were paying Manny Ramirez.”  

            Even taking the best approach, however, does not guarantee the best outcome. As Nate Silver recently stated in a Reddit Ask Me Anything Forum, “If you watch a poker hand, and a guy gets all-in before the flop with aces against kings (an 80/20 bet), our animal instinct is very much to tag him as a LOSER if a king comes up on the flop, even though he probably played his hand perfectly.” The Redskins actually did employ Dr. Andrews (using Silvers parlance, the team played pocket aces correctly) and Griffin still suffered a major knee injury. It is critical to not let what happened with the Griffin to negate the fact that the Redskins made the right strategic decision to hire Dr. Andrews. Sports organizations that employ similar logic will have the best opportunity to win their next bet. 

Block Six Analytics Engages Mike Chan As A Sales Consultant

Block Six Analytics (B6A) is pleased to announce that it has entered into an agreement with Mike Chan to become a Sales Consultant. Chan will help B6A generate new sales leads and target new customers based on his experience working as Senior Director of Strategic Marketing for the Washington Capitals / Monumental Sports and Entertainment.

            “We are thrilled to have Mike on board,” B6A President Adam Grossman said. “His experience using innovative digital media strategies and technologies to enhance revenue generation and increase customer engagement will help B6A continue its growth in the sports industry.”

            Chan is an independent consultant who assists startups and small businesses with marketing, strategy, business development, and technology. He is also an Adjunct Professor at Georgetown University, where he teaches a course on digital media. Chan hired Grossman as a Marketing Intern during his time at the Washington Capitals (how the tables have turned!). Mike has a B.S. in Materials Science and Engineering from Lehigh University, an M.S. in Industrial Engineering from Georgia Institute of Technology, and an M.B.A. from NYU’s Stern School of Business.

Company Description: Block Six Analytics has created a suite of proprietary web-based products that allows sports organizations to address critical strategic challenges. Our Partnership Scoreboard™ application uses a proprietary valuation model and technology platform to demonstrate how targeted impressions help corporate partners generate new revenue and meet sponsorship goals. In addition, B6A helps sports organizations enhance their CRM, billing, and media spend processes via a series of applications that can be integrated through a single dashboard. B6A has already worked with numerous sports and entertainment organizations including SMG @ Soldier Field, the Washington Capitals, and the University of Hartford. The company has also been featured in BusinessWeek for the innovative work that we have done in the corporate partnership space.

For more information about B6A contact info@blocksixanalytics.com.