Podcast: The big gamble — Super Bowl advertising

January 31, 2007

In the Super Bowl advertising arms race, companies spend millions on mere seconds. Is it worth it? Nancy Stephens, associate professor of marketing and director of the W. P. Carey MBA Evening Program, says no. Companies that spend huge sums hoping to hold the attention of the large Super Bowl audience compete with the party atmosphere around the big screen TV. But Ray Artigue, executive director of the W. P. Carey MBA Sports Business Program and former senior vice president of marketing for the NBA's Phoenix Suns, says the gamble can be worth it, depending on the product or service being promoted and the size of its market. 28:21 

Transcript:

Knowledge:  It is that time of year when friends and family gather around the television set to celebrate that national rite called the Super Bowl. Sure it is about two football teams fighting it out to be named champ. But for many people the game isn't what draws them in. For some, the draw is the halftime show. For many, many others it is all about the commercials.

Each year viewers are treated to a slew of commercials, each trying to outdo the others in terms of creativity, memorability, and outrageousness. In the Super Bowl commercial arms race companies spend millions on mere seconds. Is it worth it? Nancy Stephens, Associate Professor of Marketing, says no.

 

Nancy Stephens:  They believe they are getting exposure in one of the premiere American culture events of the year which is the Super Bowl, which many, many millions of people do watch every year.

 

Knowledge:  So are they getting it?

 

Nancy:  What they get is exposure in one of the premier American culture events of the year, which is the Super Bowl. If the contest is a good one, if the two teams score pretty closely and people are watching the entire four quarters, they run the risk of getting a huge audience and perhaps getting value for the money. I say perhaps because $2.8 million for 28 seconds, which is how long a 30 second ad actually is, is a lot of money. It is $100,000 per second. Very few companies can afford that.

 

 

 

 

 

Knowledge:  Does that work though? Even when it is a tight game, how do they measure whether it worked?

 

Nancy:  We have no idea who actually is watching television commercials. The best indicator is a diary, or a machine on your television set, or you responding to a telephone survey the day after. So we don't really know what's going on in your living room. Who is actually watching the screen, paying attention and understanding the message? We have no idea. There is no way to figure that out unless we put a researcher in every living room.

I'm not so sure that it does work, because even though the Super Bowl has the reputation of having a lot of advertisements and having people watch those advertisements, I'm not really convinced that they do. There is research in advertising that shows that the more people you have in a room watching a television, the less attention all those people pay to the advertising. Now, that research was not done on the Super Bowl.

Would it apply to the Super Bowl? I think it probably would. To the extent that you have at least a half a dozen people in the room socializing, perhaps eating, drinking, watching the game, I'm not so sure that I think everybody really does pay attention to the ads. I think it is likely that they don't. They may say they do, but I just think there are so many other distractions in the Super Bowl, I'm not sure that every single ad gets watched.

Some advertisers buy a big schedule where they get more than one ad in the Super Bowl. I think those advertisers have a better chance of being seen, but each ad costs an awful lot of money.

So is it worth it? If I were advising an advertiser, I would say do not buy in the Super Bowl. I think it is too expensive for what you actually get. I think you could take the same money and spend it around the Super Bowl, before, after, and do just as well.

 

Knowledge:  But on the other hand, sometimes the commercials have more legs, if you will, than the game. People are talking about the commercials more the next day. You've got the cable news networks showing snippets of the commercials that were on the night before. You get stories about who was the best and who had the worst advertising and people talk about it several days after the game.

 

Nancy:  That is really a good point. I don't disagree with that point at all. It is a question of how much do you want to risk. Will you be one of those advertisements that is talked about the next day? Will you be scheduled in the fourth quarter in a game that's actually pretty much decided by halftime or the third quarter? That is the question you have to answer as a business. Do I want to take the risk? What are my odds that I will be so much discussed the next day?

You have to be very different and creative to be discussed the next day. And of course every advertiser who goes in the Super Bowl tries to be that different and that creative but many of them fall on their faces. I think it is possible for that to happen, obviously that does happen. But do I want to spend so much money taking the risk that it will happen to me? I just think no, that I would not do it.

I took the opportunity to look at the last half a dozen Super Bowls, the records and the quarter-by-quarter scoring. If you look at that, half of the last six games -- three of the last six games, I think we could argue, were pretty much over by the fourth quarter. Now, what if you were placed in the fourth quarter? Do people still pay attention to a game that is very lopsided? I think maybe not. So, it's a question of, do you want to take that risk. I think, no, I would not.

 

Knowledge:  The counter-argument to that would be that people who never watch football, or don't do it on a regular basis, tune into the Super Bowl because its become such a spectacle and in a way, Madison Avenue has done a really good job of conditioning viewers every year to think, OK, its the Super Bowl, so this is when all those kooky commercials are going to be coming in, and you've got people who are actually sitting there, watching the commercials more than the game.

 

Nancy:  That is really an excellent point in that it's absolutely true. I take my hat off to the advertisers who have made the Super Bowl such an event, such a showcase for creative and new advertising. That is true.

In my mind the question goes back to; do I want to make a $2.8 million bet on that? Some advertisers are willing to make that bet. Many cannot afford to make that bet. For some it is the equivalent to betting the ranch. I'm not so sure that's a wise idea.

 

Knowledge:  One of the more high-profile examples of a small company really betting a lot on the Super Bowl was GoDaddy.com and those commercials really made a splash and people were talking about them for days after. They credit that for really putting their name on the map.

 

Nancy:  I agree. Go Daddy has done a brilliant job of creating great name awareness for itself and doing it with a Super Bowl strategy. They made that bet and it paid off for them. What about all the other advertisers who were in the same Super Bowl hoping to do the same thing? Go Daddy made the bet and won. A lot of advertisers made that bet and didn't win. I mean, can we remember others that aren't Go Daddy that advertised last year?

So your point is very well taken and it is absolutely correct. Go Daddy did a fabulous job, but do I want to bet $2.8 million that my creative will be so compelling? I think another thing Go Daddy did that was very smart is push the edge on the content of the advertising and create a lot of buzz of "Wow! Will CBS accept it? Will it not? Is it too racy?" When you do that, you do attract a lot of attention, but do you attract the right kind of attention -- when you push the envelope like that and be very different and be very racy and edgy. I'm not sure. Probably whether or not you do that depends on what service or product you're selling.

I think it would be very interesting to do a survey of a thousand randomly selected American homes and ask them if they had ever heard of Go Daddy and can they tell me what business it is in? My bet is that a rather large proportion would know the name but would have no idea what Go Daddy does or means.

 

Knowledge:  Now for some companies that advertise in the Super Bowl it is not the big gamble that it is for a smaller company because Coke and Pepsi have lots of money, McDonalds has lots of money.

 

Nancy:  Yes.

 

Knowledge:  Microsoft.

 

Nancy:  Budweiser.

 

Knowledge:  Budweiser, Apple. So really, who are the ones who are out there taking that chance?

 

Nancy:  I would argue that they are all taking a chance because even a big company that has a huge advertising budget. The reason they have that huge advertising budget is that they have to reach a huge target audience multiple times. So I think it is just as big of a risk for them. I think that is like saying, Well, you know, you're rich, you can afford it. But even rich companies and rich people don't like to waste their money.

So I think it is a risk for everyone. It is a risk from which the big company can perhaps recover more easily. But I think its still serious business for them. I am sure many hours are spent discussing, Should we go in the Super Bowl this year? Should we blow multi-millions of dollars in this one event?

 

Knowledge:  One thing, a strategy Pepsi and Coke both use, is the one-time-only commercial where they can get a big star who will be in that commercial. The big star will be in it because it is a one-time-only event; they won't be seeing their faces all the time. So people know that if they tune in, this will be the first and last chance you will get it to see Brad Pitt in an American television commercial. Do you think that also has been part of the conditioning? It is almost like these companies have to advertise beforehand what they will be advertising.

 

Nancy:  Yes, I think what you've said tells us the right way to look at Super Bowl advertising, that it is not typical advertising. It is advertising for public relations purposes, to create a lot of buzz for your company.

I think Pepsi-Cola is well known for the strategy that you just described, for putting entertainers and celebrities in its advertising in order to attract a lot of attention. I don't know that Coke does that, I'm not sure that that has enough to do with the product.

My own feeling is that the product or service should be the star of the advertising not Brad Pitt. I'm just not sure about that. It would be interesting to hear what some folks from the Pepsi advertising department would have to say about their strategy. It's one they've used for years. I just think that you can do so much more with that amount of money by looking at other time slots. I could be wrong about that. Many, many companies do this successfully. It is a very interesting debate.

 

Knowledge:  I think that seeing how television has evolved in just the last 20 to 25 years, from three networks to just hundreds of channels. People's attention is divided. If they have one event that can draw that many people in, even for a small amount of time, that seems to be what these companies are aiming for that if it's that one commercial, they'll be able to hit a larger audience than they would at any other time of the year.

 

Nancy:  Yes. Companies do realize great rewards, sometimes, when they do this, but it's akin to rolling the dice in Las Vegas. Yes, the payoff is going to be fantastic if we roll those dice and we hit the right number -- the seven or the 11. But it costs us a lot of money to make that bet. And if we roll those dice, pay that money, and we don't hit the right number, can we take the pain of that cost? I guess my argument is that the size of that bet isn't really worth it to most companies.

 

Knowledge:  Any further thoughts?

 

Nancy:  One reason I think this might not be such a good bet is that the markets involved here are relatively small, in the context of the United States. The biggest media markets are on the coasts: New York, Los Angeles. Now Chicago is number three. The metropolitan statistical area in Chicago is 9.4 million people. So that is great. But Indianapolis is number 37 with only 1.6 million people. So the people that are in these markets rooting for these teams are relatively small. The advertiser would be much better off if we had a New York team playing a west coast, Los Angeles, team.

We could make the point that, well, gosh, everybody in the country is interested in this contest. I'm not really so sure that is true. These are small markets. It is not as though one of these is like the Dallas Cowboys who sometimes are known as America's Team, which pulls from all over the country. Do the Indianapolis Colts or the Chicago Bears pull fans from all over the country? I'm not sure. I kind of doubt it.

 

Knowledge:  Now with the opposing side of the Super Bowl commercial argument is Ray Artigue, Executive Director of the W.P. Carey MBA Sports Business program, and former Senior Vice President of Marketing for the NBA's Phoenix Suns.

 

Ray Artigue:  That answer is a real complicated one, having to do with what kinds of companies and products and services that are being advertised. You're Doritos, by way of example, that could call most everybody a customer at some point along the way throughout the year, then that kind of reach is going to make good sense. If you're a high-end cologne or perfume, you have a much narrower or smaller target audience then I don't think it will. So to begin with it really has to do with product or service and the size of your marketplace, your audience segments and just how much you are going to be able to speak to those people.

 

Knowledge:  Obviously for small companies the gamble is greater than say for a Pepsi or Budweiser or the like. But is it, in the end if it does work, does it make everybody think wow, that's a smart move? Or, again, is that still a big gamble if you're a smaller company trying to get that quick national exposure you wouldn't get nowadays with all the cable television stations and the viewership so fragmented.

 

Ray:  Yes, for a smaller company it's a higher risk/reward equation. But on the other hand, if it's effective and they've done other things prior to the Super Bowl and following the Super Bowl that works to support the campaign, there can be great payoff. Whether it is a large company or a small company, in my estimation, it has more to do with the integration of the campaign that includes that Super Bowl ad but a number of other things that is going to be the difference in spelling failure and success.

 

Knowledge:  If you have a good commercial, you have legs beyond the Super Bowl, because two, three days after, people are still talking about the most outrageous commercials. You've got the cable news networks running them over and over again. Is that something they also consider when they're putting this together?

 

Ray:  Absolutely. They're not only talking about the best spots … Let's back up and consider that the Super Bowl is not about a football game and sitting down to watch a program for two-and-a-half, three hours -- and really, it's more like three-and-a-half, four hours if you consider all the pre-programming. It's become a part of pop culture, that one day out of the year where everyone is watching.

But because of that fact you have people not only talking about their favorite spots for days and weeks afterwards. With the advent of things like YouTube, my gosh, some of these ads can viewed infinitely as they are passed around and shared with others in cyberspace. So there is every opportunity for a spot and the campaign to transcend the singular placement in the football game.

 

Knowledge:  I would think that nowadays a company that spent so much on such commercials they really had the ground work already done for them over the last ten to fifteen years in terms of Madison Avenue conditioning viewers that the commercials you see in the Super Bowl are going to be really entertaining. Do you think these companies are cashing in on that the way the viewers have been programmed already?

 

Ray:  Absolutely, and you see that playing itself out. The advertisers now are taking surveys ahead of the Super Bowl about what their customer profile is interested in seeing.

They are even inviting fans and customers to create the spots themselves. I mentioned Doritos earlier, but they have a program called Crash the Super Bowl. It is a promotion online. It is like crashing the party. You crash the Super Bowl. You make the ad. And if you make a good one, we may air it. Not in the Super Bowl, but on that highly-trafficked Doritos website.

So it's all about engaging the fan. These are quasi-focus groups, if you think of it in those terms, in that the companies can solicit not only the ideas, but also gauge fans' perceptions. So it's become very interactive, and I think we're going to see more of that happening, all in an effort to create a community of consumers that are engaged with one another and therefore really creating kind of a viral campaign around a brand.

 

Knowledge:  Now Nancy pointed out to research that showed that the more people that are in the room, the less attention that is paid to whatever program is on television. The study wasn't done in terms of the Super Bowl, but she says that it really stands for any other big high profile event where a lot of other people would gather in front of a set. Do you agree with that?

 

Ray:  No, I don't. I haven't seen that research but I think what is different about the Super Bowl, and almost any other television program, is that it brings together a great many people to spectate the game and the advertisements. Seldom you can say that people are perhaps more interested in the ads that run within the program than they are the program itself, but clearly that has become the case around the Super Bowl and people are talking, waiting and wondering, weeks ahead of time about what Anheuser Busch is going to do this time around or what Apple is going to do. So, while I can see that kind of concept distraction with too many people in front of a television set being valid in another instance, I don't think it applies for the Super Bowl for the reasons I just mentioned.

 

Knowledge:  What if the game is a blowout as some of them have been in the past -- that by the fourth quarter it is a forgone conclusion who is going to win? Does that affect how much attention people pay to the game -- whether they're even going to sit through the rest of the game or switch channels?

 

Ray:  Well certainly, the networks and the advertisers alike hope and pray for a close contest. You know, to maintain that interest and those ratings points through the entire contest.

That said, I don't think I can ever remember somebody turning off the television set during a Super Bowl with a lopsided score. They may continue to chat and do things with a little less focus on the game, but they are going to continue to watch that last slot of ads. Some of which, frankly, are some of the best. Many of the advertisers ask to be in the second half of the game because they know that viewership often, despite the score, will increase over time.

A very unusual situation but again you have consumers that are as interested in the ads as they may be in the game with some having very low knowledge or interest in football at all.

 

Knowledge:  Does it matter which teams are playing?

 

Ray:  Well, typically it does matter which teams are playing in that they represent the large markets like New York City or Los Angeles or smaller markets like Green Bay or Kansas City. However, I think there is an exception to the rule when it comes to the Super Bowl which attracts a global community. People will tune in because of the spectacle, because of the pre-game entertainment, because of the half-time entertainment, because of the ads, as we've discussed.

So ahead of the game being played the two teams that are on the field deserve to be there because they've beaten everyone on their way to get there. That alone creates the interest, and all of America, all of the world, is going to be watching, whether they've ever set foot in Indianapolis or have any true interest for the Colts. It's bigger than that. It's larger than those kinds of affections.

 

Knowledge:  Because, obviously, this draws in people who may not have watched any games during the season or may not be football fans at all. There's just something different about the Super Bowl.

 

Ray:  The Super Bowl attracts viewership from people that have not seen a football game all year, college or professional, because, again, it's about more than just the gridiron competition.

It's the largest single sporting event in the world, and it has become a tradition. It is almost like a national holiday, when you think about it, because only on those occasions do so many tens of millions of people take time out from everything else they're doing to stop and focus on this particular event.

 

Knowledge:  One of the things that's happened is that the season's been lengthened by about a week, so the Super Bowl no longer falls on the last weekend in January, but now in early February. Do you think that's also made a difference, that it's less crowded, less post-holiday?

 

Ray:  Yes, I do. I think the NFL's been wise and strategic in extending the season, separating themselves from the College Bowl season as well as the hectic holidays and our recovery from same. And so this clears the air a little bit. They own early February, and it creates greater anticipation, as well as the media has one additional week to hype the game and to talk about it as many different aspects of what will be taking place during that three-and-a-half, four-hour broadcast.

 

Knowledge:  Now, we've talked about the companies that take this gamble and are very creative and have the millions to do it. But do you think there are some companies that maybe should sit this out, the Super Bowl?

 

Ray:  Well, certainly there are some companies that don't belong in the advertising mix for Super Bowl. Again, so much of it has to do with what their marketing goals are and what kind of budget they have to fuel their marketing plan, and really, just how broad an audience or consumer base they're after. So it's not for everybody, certainly.

Last year, Dove surprised a lot of people, what business do they have advertising in a football game, given their target audience? But it was a part of an integrated effort for their Campaign for Real Beauty', and it allowed them to emphasize that, highlight their Self-Esteem Fund, and a number of other things. My view is that they actually helped themselves by surprising many as a new advertiser in the mix of the traditional advertisers like Coke and Gatorade and Nike and Budweiser and the ones you expect to see.

 

Knowledge:  In terms of Super Bowl ads, is there such a thing as going too far?

 

Ray:  There is a certainly the risk of going too far as it relates to content. Again, that is going to be a case by case situation. You want to be true to your brand and your positioning. So that comes first and foremost. If you are working within the confines of your brand character then it can be very subjective to say that you've gone too far. Because going too far may be very much a part of what your MO is throughout the year, having nothing to do with the Super Bowl, but just the way you work to project yourself.

 

Knowledge:  Any further thoughts?

 

Ray:  I guess the other thing I would share, the other phenomena that we see that plays into all this, is the way in which public relations industry has become involved, and really works in advance of the Super Bowl broadcast to be sure that their company's investment is maximized, by creating awareness in national publications like USA Today, or The LA Times, The New York Times. Pitching those that cover the game about their companies, their products, and sort of teasing what's to come with these ads.

So it's about starting early, building a campaign in advance of the Super Bowl, and then having a post-game effort, as well, that creates for this overall integrated campaign that just happens to include a 30-second Super Bowl ad.