Super Bowl ad curse? The shares of these Big Game advertisers did not do very well
In a fragmented media landscape, events like the Super Bowl are valued by advertisers for the exposure they provide.
More than 100 million people are expected to listen this Sunday when the Philadelphia Eagles take on the Kansas City Chiefs. Many watching the game will be as attentive to the commercials as they are to the action on the field. These commercials are an institution in themselves, generating conversation weeks before and days after the Big Game. Well-crafted Super Bowl ads can be recalled by consumers years after their debut.
But capturing those eyeballs comes at a high cost. This year, companies are paying about $7 million for a 30-second spot — and that’s just for the airtime. On top of that comes the cost of hiring the talent needed to produce the ad, and the cost adds up.
Advertisers come and go
The value of those expenses can be hotly debated. For companies that sell beer, chips or cars, the game is often an annual ritual. But other advertisers may come and go.
This certainly applies to the crypto companies that bought up airtime last year. Cryptocurrency exchange FTX had received praise 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 doubt cryptocurrency. “Don’t be like Larry,” it said.
Months later, some skepticism seems warranted. FTX, now bankrupt, has collapsed in a scandal under investigation by federal prosecutors.
So does Super Bowl exposure really help drive business? Judging by the companies’ stock prices, most of them didn’t have a great 2022.
To take Coin base, another cryptocurrency exchange. The bouncing QR code commercial was hailed as hugely successful. It drove so many viewers to Coinbase’s app that it crashed on the night of the Super Bowl.
Coinbase’s stock is down 64% since that night. And the company said it won’t be back for this year’s game.
Shares of online car sellers Carvana And Pious have gone even worse. Their shares are down 90% and nearly 83% respectively. Neither will advertise during the game this year.
Of course, last year’s sharp declines in some advertisers speak to broader declines in the market last year, with a number of tech names on the list underperforming.
‘Not a good appearance’
Deb Gabor, CEO and founder of Sol Marketing, said that given the high cost of in-game advertising, companies should consider the broader economy. For the most part, they are, she said, quoting Toyota as an example, as the automaker is skipping the game for the first time since 2017.
This year’s list of advertisers is full of snacks and booze, she said. “People will need comfort,” she said. “And snacks and booze are a place where they’ll find it.”
“People will need comfort. And snacks and booze are a place where they’ll find it.”
Gabor keeps an eye on Bay Area technology company Business day narrow. The human resources software maker doesn’t seem right for a glitzy Super Bowl commercial, but he’s spending big bucks on a 60-second spot that riffs on how companies often call their top employees rock stars. The ad is chock-full of music legends, from Ozzy Osbourne to Joan Jett and Kiss frontman Paul Stanley, among others.
Gabor said she’s not sure how the company will leverage this multimillion-dollar spot outside of the Super Bowl. However, she said the company has drawn some bad press since word of the commercial came out around the time it announced plans to cut about 3% of its workforce.
“It doesn’t look good,” Gabor said.