Super Ads are scary.
January 28, 2008With all the blogosphere hype of Super Bowl commercials and ad spending, there have been a couple of companies that have been timid about there decision to invest, even scaring investors resulting in stocks dropping. The faltering U.S. economy is leaving consumers a little more wary of their budgets. To put it simply, people are spending less.
Hyundai, has been reviewing its decision to advertise in the Super Bowl based on signs that consumers are becoming more wary of spending. The company ultimately decided to stick with its plans and will have two spots during the game.But athletic apparel maker Under Armour Inc. freaked investors out last week when they announced a new brand campaign that was going to premiere as a 60-second spot during the Super Bowl – and said that marketing expenses will represent as much as 13 percent of the company’s 2008 net revenues. I wonder if they have even seen the creative before they freaked out. This is a business of risk, right? That be funny if the spots are awesome, for the creative’s sake I hope they are.
Ben Rooney of CNN Money reports that this prompted a Wachovia Capital Markets analyst to downgrade the stock due to concerns that the company was spending too much during a time of economic weakness. Shares tanked 24 percent over the next two days before more favorable research reports from Goldman Sachs and Susquehanna helped the stock recover.
Nationwide is not showing up for the big show at all this year. They reported having financial success with last year’s spot featuring K-Fed. How? No one will ever know.So why isn’t Nationwide in the game this year?
“It wasn’t a financial decision,” said Steven Schreibman, Nationwide’s vice president of advertising. Schreibman said he would have liked to advertise during this year’s Super Bowl but didn’t like the concepts he looked at for the company’s Life Comes at You Fast campaign.”Viewer’s expectations are higher,” following the success of last year’s spot, Schreibman said, adding that “I know we could have topped it.” But obviously, he didn’t know it enough to stick his neck out there and try it.
Instead, Schreibman said Nationwide will focus on advertising opportunities available through its new seven-year sponsorship of the NASCAR Nationwide Series. Sounds like a match made in heaven to me.
Not only do you have to consider companies that are staying out of the game, what about the ones that couldn’t even get into the ring. Can’t wait to see them battle it out next Sunday. Thank you CNN for the great article.
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Allen Taylor
How do corporations just announce, days before the event, they’re launching a multi-million dollar ad campaign? How did the investors not know about it? Also, can you just call up whoever’s in charge of advertising for the Super Bowl, and say ‘hey I’ve got something!’…again, days before the event? It is days away, right? Please tell me football season is almost over. Admittedly, I’m n00b when it comes to the finer points of advertising’s contractual issues…oh wait, that’s why I’m asking you.
See you at the track next weekend,
rp
Well, it’s definitely not a case of not knowing, they had to have expected something; I think it was the unexpected media placement-the Super Bowl-that freaked them out. In my experience, the Chief Marketing Officer is on the board of investors, and this board trusts him to make final marketing decisions. That way they don’t have to deal with all those issues, just one person makes the final decision. And apparently they [Under Armour] decided to hit the Super Bowl with a :60, but didn’t tell investors, but presented it to them after the fact. The reason it scared them is because of how expensive it is to run a :60, costing them over 5 million just for media placement-that’s not counting production and creative time to produce the spot. And when that 5 million makes up almost 13 percent of your revenue goals for the year being spent in the first quarter, freaks investors out.
But that risk is part of advertising anyways, I think the panic is for nothing. Under Armour is a pretty popular brand of athletic apparel, and it’s not like they’re previous spots have been terrible. Very intense, game like situations with an Under Armour team not wanting you in their house. Who every got out or sold, will regret it soon. This is a perfect target audience for them, and the audience is huge.
Short Answer: Creative advertising doesn’t always go all the way up the chain to the investor board because they’re people hired and trusted to make those decisions. In this case the money spent was a little more-obviously-than the investors felt comfortable with, but the deal was done. I look forward to seeing the creative, especially if it freaked them out.
And yes, the Super Bowl is only days away-this Sunday to be exact.