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.