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The stocks of those Super Bowl advertisers didn’t fare so well

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Recent England Patriots fans erupt because the Seattle Seahawks Russell Wilson’s pass is intercepted on the goal line to make sure the victory for the Recent England Patriots in Super W 49.

Bob Berg | Moment Mobile | Getty Images

In a fragmented media landscape, events just like the Super Bowl are prized by advertisers for the exposure they provide.

Greater than 100 million individuals are expected to tune on this Sunday when the Philadelphia Eagles tackle the Kansas City Chiefs. Many watching the sport might be just as attentive to the commercials as they’re to the motion on the sector. These commercials are an establishment in and of themselves, with the ads generating conversation for weeks ahead and days after the massive game. Consumers might recall well-crafted Super Bowl ads years after their debut.

But capturing those eyeballs comes at a steep cost. This yr, firms are paying about $7 million for a 30-second spot — and that is only for the air time. Add on top of that the associated fee of hiring the talent needed to supply the ad, and the prices spiral even higher.

Advertisers come and go

The worth of that spending will be fiercely debated. For firms that sell beer, chips or cars, the sport is usually an annual ritual. But other advertisers might come and go.

This actually is true for the cryptocurrency firms that bought up airtime last yr. Crypto exchange FTX had received accolades for its ad, which starred comedian Larry David as a time-traveling skeptic, pooh-poohing inventions from the wheel to the lightbulb. The business encouraged viewers to not doubt cryptocurrency. “Do not be like Larry,” it said.

Months later, it seems some skepticism was warranted. FTX, now bankrupt, has collapsed in a scandal that’s being investigated by federal prosecutors.

So does Super Bowl exposure truly help boost business? Going by the businesses’ share prices, most did not have a fantastic 2022.

Take Coinbase, one other cryptocurrency exchange. Its bouncing QR-code business was hailed as wildly successful last yr. 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 evening. And the corporate said it won’t be back for this yr’s game.

The Super Bowl ad curse

FactSet Universal Screening
Symbol Name Stock Exchange Sector/Industry Market Value Price change since 14/2/2022 $ lost/made if invested $10,000 Upside to avg PT (%) (%) Buy Rating
CVNA Carvana, Class A NYSE Consumer Cyclicals 2,645.8 -90.0 -9,000.0 -23.4 11.1
VRM Vroom NASDAQ Consumer Cyclicals 163.0 -82.9 -8,290.0 13.7 0.0
COIN Coinbase Global, Class A NASDAQ Finance 15,760.5 -64.4 -6,440.0 -5.0 26.7
AMCX AMC Networks, Class A NASDAQ Consumer Services 775.4 -57.4 -5,740.0 7.4 0.0
FVRR Fiverr International NYSE Technology 1,599.6 -47.6 -4,760.0 -8.4 60.0
EXPE Expedia Group NASDAQ Consumer Services 18,598.2 -39.6 -3,960.0 5.1 46.7
MNDY Monday.com NASDAQ Technology 6,423.8 -37.1 -3,710.0 1.4 88.2
PARA Paramount Global Class B NASDAQ Consumer Services 14,696.1 -36.0 -3,600.0 -14.9 24.1
AMZN Amazon.com NASDAQ Consumer Non-Cyclicals 1,025,238.0 -35.5 -3,550.0 32.3 76.8
GOOGL Alphabet, Class A NASDAQ Technology 1,276,392.0 -26.7 -2,670.0 29.2 74.0
DKNG DraftKings, Class A NASDAQ Consumer Services 14,875.7 -20.4 -2,040.0 13.9 48.4
INTU Intuit NASDAQ Technology 118,477.5 -20.3 -2,030.0 10.7 71.4
CRM Salesforce NYSE Technology 169,630.0 -17.8 -1,780.0 6.7 66.7
META Meta Platforms, Class A NASDAQ Technology 475,590.5 -15.7 -1,570.0 8.8 56.9
GM General Motors NYSE Consumer Cyclicals 57,975.1 -14.1 -1,410.0 11.2 54.2
MSFT Microsoft NASDAQ Technology 1,985,486.0 -9.6 -960.0 5.1 72.5
PLNT Planet Fitness, Class A NYSE Consumer Services 7,456.9 -9.6 -960.0 11.6 88.2
NFLX Netflix NASDAQ Technology 163,366.5 -7.5 -750.0 -3.5 42.2
BKNG Booking Holdings NASDAQ Consumer Services 94,067.4 -4.7 -470.0 -2.0 50.0
PEP PepsiCo NASDAQ Consumer Non-Cyclicals 235,808.7 2.7 270.0 10.0 34.8
K Kellogg NYSE Consumer Non-Cyclicals 22,934.1 3.8 380.0 7.6 9.5
WMT Walmart NYSE Consumer Non-Cyclicals 378,145.3 4.7 470.0 13.9 54.8
YUM Yum! Brands NYSE Consumer Services 37,019.4 8.3 830.0 7.2 33.3
TMUS T-Mobile US NASDAQ Telecommunications 178,921.8 14.6 1,460.0 22.9 75.8
HOLX Hologic NASDAQ Healthcare 21,107.5 21.8 2,180.0 3.3 38.1

Source: CNBC; FactSet

Shares of online auto sellers Carvana and Vroom have fared even worse. Their stocks are down 90% and nearly 83%, respectively. Neither will advertise in the course of the game this yr.

After all, the steep declines of a few of last yr’s advertisers speak to broader declines out there in 2022, with quite a lot of tech names on the list faring the worst.

‘Not a great look’

Deb Gabor, CEO and founding father of Sol Marketing, said given the high cost of promoting in the course of the game, firms must be mindful of the broader economy. For essentially the most part they’re, she said, citing Toyota for example, for the reason that automaker is skipping the sport for the primary time since 2017.

This yr’s list of advertisers is stuffed with snack food and booze firms, she said. “Persons are going to want comfort,” she said. “And snack food and booze are one place they will find it.”

Gabor is watching Bay Area tech company Workday closely. The maker of human resources software doesn’t appear to be a natural fit for a glitzy Super Bowl business, but it surely’s spending big on a 60-second spot that riffs on how firms often call their top employees rock stars. Its ad is chock filled with music legends, from Ozzy Osbourne to Joan Jett and Kiss frontman Paul Stanley, amongst others.

Gabor said she’s undecided how Workday will leverage this multimillion dollar spot beyond the Super Bowl. Nevertheless, she said, the corporate has attracted some bad press since word of the business got here out across the time that it announced plans to chop about 3% of its staff.

“It is not a great look,” Gabor said.

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