32 Pages Posted: 27 Jan 2014 Last revised: 7 Mar 2015
Date Written: October 1, 2014
We explore the effects of television advertising in the setting of the NFL’s Super Bowl telecast. The Super Bowl is the largest advertising event of the year and is well suited for measurement. The event has the potential to create significant increases in “brand capital” because ratings average over 40 percent of households and ads are a focal point of the broadcast. Furthermore, variation in exposures is exogenous because a brand cannot choose how many impressions it receives in each market. Viewership is determined based on local preferences for watching the two competing teams. With this significant and exogenous variation in Super Bowl advertising exposures we test whether advertisers’ sales are affected accordingly. We run our analysis using Nielsen ratings and store level sales data in the soda and beer categories. We find that Super Bowl ads can generate significant increases in revenue and volume per household. However, when two major soda brands both advertise, they receive no profit gain to offset their advertising investments. Exploring the mechanism behind the ad effects, we find that Super Bowl ads build an association between the brand and viewership of sports more broadly. The competitive effects suggest that two competing brands cannot however capture the same association. In beer, Budweiser has purchased exclusive advertising rights in the Super Bowl for more than 20 years and appears to be receiving long run returns from their ownership of a sports association.
Keywords: advertising, brand management, complements, television
Suggested Citation: Suggested Citation
Hartmann, Wesley R. and Klapper, Daniel, Super Bowl Ads (October 1, 2014). Stanford University Graduate School of Business Research Paper No. 15-16. Available at SSRN: https://ssrn.com/abstract=2385058 or http://dx.doi.org/10.2139/ssrn.2385058