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Would You Buy a Super Bowl Ad?

By Chris Haltiner '13 and Liz Oates '13  |  february, 2013, Issue 1

Most media attention to Super Bowl ads is centered around which ads were the funniest or most controversial. We, however, were curious to learn about the business side of Super Bowl ads. Who are the companies that are willing to spend nearly $4 million on average for a 30-second spot? We tracked the ads while watching the game and researched the companies. This observational data may not be perfect – for example, we can't easily discern between local and national ad spots, and for privately owned companies it can be hard to get accurate estimates for the revenues and advertising budgets – but we think that our information can provide some interesting high-level insights.

How big are the companies that bought Super Bowl ads? Of the 42 companies for whom we observed ads, half of them generate revenues of more than $30 billion per year, putting them safely in the league of heavy hitters. But you wouldn't find many of these companies on the Fortune 100 list. Why not? Eight are foreign companies: Daimler, Honda, Hyundai, AB InBev, Samsung, Toyota, Unilever and Volkswagen.

Who are the smaller brands making big bets on the Super Bowl? The smallest company we observed was SodaStream, which generated about $300 million in revenue in 2011. There may have been some bigger bets that we can't measure, as many of the brands that advertised are part of large conglomerates that don't report brand-level data in their 10-Ks. And while the price of a Super Bowl ad may be small compared to the advertising budget of the conglomerate, it can still be very significant compared to the budget of a brand. Large companies used these ads to introduce new products: AB InBev introduced Budweiser Black Crown and Beck's Sapphire, and Kraft advertised Mio Fit.

Another example of a big bet is Hyundai, whose U.S. CEO, John Krafcik, was quoted in a WardsAuto article last year as saying that the investment in the 2012 Super Bowl was part of a "half a billion dollars more or less" marketing budget. Given the size of the budget, we think Hyundai's investments in this event are significant, with an ad during every quarter of the game – for Hyundai during the first half and Kia during the second half. That being said, Hyundai's return to advertising in the Super Bowl comes after a "record sales year" in the U.S. in 2012.

GoDaddy's investment was also significant, with two ads airing during the game. The latest revenue estimate we could find was $1.1 billion. However, GoDaddy reported that its Super Bowl ads led to the best sales day in the company's history. And given that this is not the first time GoDaddy has advertised during the Super Bowl, the numbers seem to add up for them. In a recent Forbes interview, Barb Rechterman, GoDaddy's CMO, cited low awareness of the company as being the primary driver of the initial decision to advertise in the Super Bowl. On the flipside, there is a history of failed dot-coms that in the past wrongly thought buying a Super Bowl ad was a surefire way to increase brand recognition.

Our initial sense is that buying a Super Bowl ad, if executed well, seems like a good investment for a brand with significant market potential and low public awareness. That being said, we'd love to see more in-depth analysis on this. In typical Chicago Booth style, we feel that the more we learn, the more we have questions.

Last Updated 2/10/13
Last Updated 2/10/13