Jan 30 2018
In 2017, 111.3 million people tuned in to watch the New England Patriots mount a monumental comeback against the Atlanta Falcons to win Super Bowl 51. While the game itself has been heralded as one of the greatest Super Bowls of all time, the matchup was also significant in terms of advertising, as costs for a 30-second midgame commercial averaged $5.1 million. The cost of a 30-second ad is expected to stagnate in 2018, after a sustained run-up in the cost of ad time over the past decade. Despite this, companies are anticipated to continue investing in midgame advertisements in hopes of leaving a lasting impression on the millions of game viewers. IBISWorld has broken down the five sectors expected to benefit most from Super Bowl advertisements in 2018.
The Automotive Sector
Companies in the automotive sector typically spend the most on Super Bowl advertisements. Operators in this sector spent an estimated $71.8 million in 2017, as seven automakers across the Car and Automobile Manufacturing and SUV and Light Truck Manufacturing industries, including Fiat Chrysler Automobile and Toyota, purchased commercial spots. In recent years, foreign automakers, which dominate the US auto market, have increasingly invested in Super Bowl advertising, accounting for more than three-fourths of auto ads in 2017.
Moving forward, despite improving economic conditions, Car and Automobile Manufacturing industry operators have recently experienced volatile sales, driving many of them to reevaluate their spending. This trend has led the automotive sector to spend increasingly less on advertising during the Super Bowl in every year since 2014. Many automakers have purchased shorter Super Bowl commercials or in some cases, passed on advertising altogether. Alternatively, some advertisers, such as Ford, have opted to purchase ads during the pre and postgame shows in an attempt to cut costs, while not completely removing themselves from Super Bowl advertisement. Despite these factors, the automotive sector is expected to continue to be one of the largest advertisers during the Super Bowl.
The Food and Beverage Sector
In 2017, the food and beverage sector spent $84.6 million on Super Bowl advertising as demand increased for snack foods and soft drinks due to increased disposable income. While these trends have benefited overall consumption of snack food and soda, companies in the Soda Production and Snack Food Production industries have begun shifting their advertising focuses during the Super Bowl, toward digital media as opposed to traditional TV advertisements. This was clearly on display in 2017, when Pepsi Co., whose commercial had been a mainstay during the Super Bowl, decided to not advertise during the game for the first time in six years.
Beer is also included in this sector. Over the five years to 2018, Anheuser-Bush, which comprises nearly 50.0% of the Breweries industry, has spent the most on Super Bowl beer advertisements, shelling out $35.9 million for three-and-a-half minutes of ad time in 2017 alone. Due to a multiyear contract with the National Football League (NFL), which extends through 2022, Anheuser-Busch is the only beer advertiser permitted to use the Super Bowl logo and the logos of NFL teams on its products. As a result, all Anheuser-Busch brands, including Budweiser, Bud Light, Busch and Michelob Ultra, will maintain prominent Super Bowl commercial slots in the next four years. However, increased craft beer popularity could threaten Anheuser-Busch’s dominance in both the Breweries industry and in Super Bowl advertising after 2022.
The Technology Sector
Over the five years to 2018, IBISWorld estimates that the number of US broadband connections has increased an annualized 8.3%, which in turn drives demand for technology sector services, such as online tax software, website and domain development software and mobile service providers. Consequently, companies in the Website Creation Software Developers and Tax Preparation Software Developers industries, such as Wix.com and TurboTax, have increased Super Bowl ad spending. In 2017, both of these companies aired a 30-second commercial during the game.
While software developers have increased their advertising expenditures during the Super Bowl, so have companies in the Wireless Telecommunications Carriers industry. For example, in 2017, Deutsche Telekom (T-Mobile’s parent company) spent an estimated $30.8 million on three minutes of ad time. This represents an increase in advertising expenditure from $14.4 million in 2016. While T-Mobile is not the only telecommunications company Deutsche Telekom owns, the company elected to only run ads for T-Mobile during the game; commercials for MetroPCS, another telecommunication company it owns, ran during the postgame. Over the next five years, IBISWorld anticipates that the percentage of services conducted online and the number of mobile internet services will rise significantly. As a result, the technology sector’s share of Super Bowl advertising is expected to continue to grow.
The Media Sector
During Super Bowl 51, the media sector, which includes the Movie and Video Production and the Internet Publishing and Broadcasting industries, spent $63.1 million on advertising. While box office revenue has been volatile in recent years, movie studios have continued to advertise large, upcoming theatrical releases during the Super Bowl. For example, Universal Pictures promoted “The Fate of the Furious” during the game in 2017. Furthermore, online streaming platforms such as Netflix and Hulu have also started advertising during the Super Bowl. These online publishers have used the Super Bowl as an opportunity to showcase original series they produce. Accordingly, during Super Bowl 51, Netflix chose to run an advertisement for “Stranger Things,” while Hulu ran a commercial for “The Handmaid’s Tale.”
The Consumer Goods Sector
While the consumer goods sector encompasses a wide variety of industries and goods, a specific type of product was highlighted during Super Bowl 51. Specifically, product developments within the Soap and Cleaning Compound Manufacturing industry were showcased during the game, specifically from Procter & Gamble. The company aired multiple commercials about its subsidiary Tide’s pod detergents. In total, Procter & Gamble spent an estimated $25.7 million on advertising during the Super Bowl in 2017.
Edited by Miranda Romano. Designed by Victoria Wolak.