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Super Bowl Advertising Correlation

February 1, 2008 1 Comment

I read an interesting article in today’s Wall Street Journal that talked about the correlation between advertising in the Super Bowl and stock performance: Super Bowl Sponsor’s Stocks Tend to Outplay S&P 500 in Week Following Big Game (login required). Researchers from the University of Wisconsin found a correlation between the companies that advertise during the Super Bowl and those same companies stock prices during the week after the big game. Those companies that ran ads during the bowl outperformed the S&P 500 during the week following the game in 10 of the past 12 years.

Does this mean that the $2.7 million for a 30 second spot is worth the money? For some, it might. As long as you have discretionary marketing budget to spend on that advertising, you can capture a lot of eye balls during the game. The one time during the year when you don’t want to Tivo the game to miss the commercials.

This reminded me of the 2000 Super Bowl. At the time, I was working for a company that produced software to manage the web traffic on the largest websites of the day. One of our new customers was a startup called OurBeginnings.com (yes, during that era when companies name was also their web address). They spent a large portion of their funding to do a Super Bowl advertising launch for their online invitation and card printing service (think wedding invitations and the name starts to make sense).

The week leading up to the game was a scramble to get their new data center and infrastructure installed, tested, and operational. During the game, we had a staff of people watching the site from different parts of the country, myself included. It was quite amazing to watch their logo come up during the 15 minute pre-game session they sponsored and then watch the traffic to their website go up. The most impressive was the 30 second ad spot they bought; as soon as it finished playing and as fast as I could switch my eyes from the TV screen to my laptop screen, I literally watched the website traffic go up and to the right. We were monitoring the site in real-time and I witnessed the spike as it happened.

The image to the right is a screen capture that I took of the statistics the next morning. It is quite amazing how the Super Bowl ads can have such an immediate impact on the viewers. The large spike is right after the 30 second ad ran and you can see that the volume of visitors is considerably above average for the few hours after that spike (click the image for a larger view).

So, I’m not surprised that those Super Bowl ads were impacting people still for a week after the game. Just think about how many times you have talked about the best ads from the game during that week? I’m sure there are a lot of marketing executives who love to point to this study to justify the investment.

(Oh, about OurBeginnings…just like Pets.com, Ameriquest, and others that have advertised during the Bowl and then disappeared…they went out of business about a year later, after having passed up a $40M acquisition offer. 🙂 )

Update: I was reminded by my friend Richard Lewis, who was the CTO of ActiveIngredients which was behind OurBeginnings, that they sponsored a 30 minute segment of the pre-game show, ran 5 ads during the Super Bowl (the first one aired is what generated that huge spike), and were offered $45M for the company.

Test Tube Evolution

February 1, 2008 Leave a Comment

Today latoga’s box view becomes latoga labs.

I have discontinued my old blog address. If you were a subscriber to that blog’s feed you will automatically receive posts from the new blog (you might want to to update the title on your feed reader though).

latoga labs was born out of evolution. Change is constant. After some recent changes and requests by people for my expertise on a consulting basis I decided to launch latoga labs. The blog will continue as my lab notes; focusing on Technology, Business, and the latest trends and activities between the two. But since it is a lab, expect some experiments which may not appear immediately related.

There are also some projects that I have been working on as well as others that I have been approached about; more information about those will appear on that topic over time.

And of course, if there is a project or initiative that my expertise would lend itself to, please contact me. You can see the about page as well as my LinkedIn profile to get an idea of the areas of my experience and that I focus on.

Welcome to the labs!

Microsoft Bids $44.6B for Yahoo

February 1, 2008 Leave a Comment

I open up my morning reading and here is the first thing that grabs me:

Microsoft Offers $44.6 Billion for Yahoo

Of course, something of this magnitude the first place I went for comments was to the Scobleizer. After his stint at MS and his frustrated departure, I knew he would have some interesting thoughts (also a great link to all the buzz around this already).

My initial reaction is that this is a great business merger. Squeeze some huge operating efficiencies (aka, lay off alot of people) and give the combined entity a better chance to compete against Google…not say that they would be able to compete, as the result of that would be seen only a year out and there are a lot of decisions to be made between now and then that will impact the effectiveness of the merger.

I think actually making this work would be tough considering the cultural difference between the two. There would also be the potential for a large exodus of users who don’t want to support MS. Maybe a better acquirer would be Google…as if that would get past the regulators.