The Super Bowl is the sporting event of the year, drawing expansive viewership and media attention each year from the game itself to the halftime performance and the commercials. Companies pounce upon the opportunity to display their most creative and entertaining ads in the homes of hundreds of millions in the U.S. and abroad, but the millions it costs to run an ad may not be worth it.
“I like football and I like money, so why not pair stock returns with football,” said Stefan Hock, assistant professor of marketing, of his interest in researching whether Super Bowl ads are worth the expense.
“The Super Bowl attracts every year more viewers and media attention for its advertisements than any other event in the U.S.,” Hock said, but the advertisements come with a hefty price tag. The cheapest 30-second commercial for the February 2016 Super Bowl was $4.5 million and this year, “it’s projected to be $5 million.”
“As a firm you’re wondering, is that investment worth it?” Hock said, noting that previous research has produced mixed results.
Hock and co-researchers Sascha Raithel from Free University of Berlin and Charles Taylor from Villanova University found that the ads can be worth it, but not for every company. “As with most things, there are good advertisements and bad advertisements. Our findings show that good advertisements, advertisements that increase customer-brand equity, only those commercials help firms,” he said.
Hock describes customer-brand equity as “a construct that measures customers’ feelings, thoughts, experiences, and images with a certain brand.” If the commercials are increasing positive feelings for the brand among consumers, firms are more likely to experience increases in stock price following the Super Bowl.
However, there is a ceiling effect. “Firms that have a very high pre-Super Bowl brand equity, firms that have a very favorable impression in the minds of consumers, those firms have a harder time benefitting from those commercials because they’re already at a very high level,” Hock said.