2016 Sport Marketing Association Conference (SMA XIV)
Super Bowl or Super Bust: Are the Big Game Ads Delivering Value?
Windy Dees, University of Miami
Tywan MartiN, University of Miami
Warren Whisenant, University of Miami
Thursday, November 3, 2016
9:00-9:25 AM, Meridian East
25-minute oral presentation
(including questions)
Purpose
The purpose of this research was to examine companies that purchased 30-second Super Bowl television
advertisements and determine if those companies’ stock values improved over the following year.
Introduction
The Super Bowl is the biggest sporting event of the year in the United States. The game has mass appeal and
captivates a large audience because it includes championship football, a star-studded halftime show with multiple
musical acts, and parties that take place in homes and bars all over the country. The championship game for the
National Football League (NFL) is one of the most highly watched events in television history. Nine of the top ten
most watched TV broadcasts in history were Super Bowls and the other broadcast was the finale of the television
show M.A.S.H. (February, 1986) which drew 106 million viewers (Huffpost Media, 2015). Super Bowl 50 moved to
the top of the list as the most watched broadcast in TV history with 167 million viewers tuning in for either all or
part of the game (CNN Money, 2016). Average viewership for the broadcast was 115.5 million. This number did not
include the 1.4 million people per minute who streamed the game online which set a record for CBS (CNN Money,
2016).
Clearly, the exposure companies receive from viewership of the Super Bowl is massive, but it comes with a huge
price tag. Costs for a 30-second ad spot in the Super Bowl have risen steeply over time. In the last 15 years, the cost
has more than doubled, from $2.3 million in 2002 to $5 million in 2016 (Statista, 2016). That equates to $166,666
per second. The first TV ads for the Super Bowl in 1967 cost $42,000. So, the question becomes, “Is the cost of a
Super Bowl ad really worth it?” Will the television ad produce a return on the company’s investment in some
meaningful way? The current research study examined this question by evaluating the cost of 30-second Super Bowl
TV ads and how these ads impacted companies’ stock prices over the following year. Some research has suggested
that Super Bowl commercials cause a slight increase in companies’ stocks on the Monday following the game
(Chang, Jiang, & Kim, 2009), but the impact on company stock prices over the course of a year was not examined.
Theoretical Framework
Exchange theory suggests that two parties entering into a business transaction will do so only if both parties see
value in making the transaction (Shank & Lyberger, 2013). If either party feels they are giving far more than they will
receive in value, they will likely not agree to the transaction. Purchasing a Super Bowl ad has become one of the
largest single transactions a company will make in terms of investing in one particular marketing strategy. As costs
continue to rise each year for the same 30-second spot, companies have to make decisions about whether or not this
business transaction can provide adequate value, or more importantly, a long-term return on investment (ROI).
Representativeness Heuristic (or Bias) “is the tendency to judge the frequency or likelihood of an event by the extent
to which it resembles the typical case” (Cherry, 2015, p.1). The theory was developed in the 1970’s by Amos Tversky
and Daniel Kahneman who explained the social decision-making phenomenon as a “mental shortcut” which assisted
people in evaluating situations more quickly. Meaning, people often judge what will happen based on past
experiences. Or, they may judge a particular situation and whether or not they like it based on how that situation is
represented. When it comes to buying stock in a company, rather than conducting hours of research, a person might
Indianapolis, IN
November 2-4, 2016
2016 Sport Marketing Association Conference (SMA XIV)
make a quicker decision by going with a large, successful organization that has been around for many years, or one
that has had recent financial success. Since Super Bowl ads tend to be purchased by big, global companies due to the
high cost and massive reach, some investors may view this as a representation of a company’s value and future
success. If a company is new, but has the ability to invest $5 million in a 30-second commercial, investors may also
see this as a positive representation of the company’s current or future success.
According to Kim (2016), Super Bowl commercials are very popular and have a reputation for being appealing. This
could lead to increased stock value in two ways: 1) The ads serve as a reminder about the company’s goods and
services and lead to increased purchase, and 2) the “liking” of the company that created the appealing ad could lead
to buying the firm’s stock. However, the Representativeness Bias is just that. It is a bias and not always the best way
for consumers to make decisions. For example, during the dot.com boom many startup companies bought Super
Bowl commercials while they were experiencing financial success, but later went under.
Research Questions
The aforementioned review of literature was used to develop the following research questions:
RQ1: Do Super Bowl ads have a positive impact on firms’ stock value the Monday after the game?
RQ2: Do Super Bowl ads have a positive impact on firms’ stock value 3 months after the game?
RQ3: Do Super Bowl ads have a positive impact on firms’ stock value 1 year after the game?
Method
Super Bowl ads 30-seconds in length were examined from 2000-2015. Companies who purchased 30-second spots
that aired in the first half of these Super Bowls were included in the analysis. Only first half ads were included to
control for blowout games where significantly less viewers tuned in second half because the game was one-sided.
Data was collected on the price paid for the ads, as well as the companies’ stock prices the Friday before the Super
Bowl (as a baseline stock measure), the Monday after the game, three months after the game, and the Friday before
the following year’s Super Bowl (one year later).
Results/Discussion
Results, discussion, and implications of the study will be provided in the presentation following the data analysis.
References
Chang, C., Jiang, J., & Kim, K. (2009). A test of the representativeness bias on stock prices: A study of Super Bowl
commercial likeability. Economics Letters, 103(1), 49-51.
Cherry, K. (2015). What is the representativeness heuristic? Retrieved from:
http://psychology.about.com/od/rindex/g/representativeness-heuristic.htm
CNN Money (2016). Super Bowl 50 audience is third largest in history. Retrieved from:
http://money.cnn.com/2016/02/08/media/super-bowl-50-ratings/
Kim, K. (2016). Do Super Bowl ads affect stock prices? Retrieved from:
http://www.forbes.com/sites/kennethkim/2016/02/05/do-super-bowl-ads-affect-stock-prices/#513e5ffb311d
Huffpost Media (2015). Super Bowl XLIX was most-watched show in U.S. television history. Retrieved from:
http://www.huffingtonpost.com/2015/02/02/super-bowl-tv-ratings-2015-patriots-seahawks_n_6595690.html
Shank, M. & Lyberger, M. (2013). Sports Marketing: A Strategic Perspective, 5th Edition. New York: Routledge.
Indianapolis, IN
November 2-4, 2016
2016 Sport Marketing Association Conference (SMA XIV)
Statista (2016). Super Bowl ad costs. Retrieved from: http://www.statista.com/statistics/217134/totaladvertisement-revenue-of-super-bowls/Syracuse.com (2016).
Syracuse.com (2016). Super Bowl 50: How much does a 30-second television commercial cost? Retrieved from:
http://www.syracuse.com/superbowl/index.ssf/2016/02/super_bowl_50_how_much_does_a_30second_television_commercial_cost.html
Indianapolis, IN
November 2-4, 2016