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Jan. 12, 2004

UW-Eau Claire Marketing Researchers Study Super Bowl Ad Successes

Spending millions to advertise in the Feb. 6 Super Bowl will pay off for some and be wasted dollars for others, say marketing experts at the University of Wisconsin-Eau Claire, who have been researching Super Bowl advertising successes for five years.

Advertisements during the high-profile game — the best-rated TV show every year since 1995 — are selling for an average of $2.4 million per 30-second spot, a record amount for the National Football League's championship game.

Among those most clearly benefiting from advertising during the game is Hollywood's movie industry, said Dr. Charles Tomkovick, UW-Eau Claire professor of management and marketing, who with Dr. Rama Yelkur, associate professor of management and marketing, completed the first known Super Bowl advertising effectiveness study of its kind.

"All else being equal, we know from this study that spending $2 million-plus for a 30-second movie ad in the Super Bowl will pay off handsomely for a majority of the studios," Tomkovick said, noting that Super Bowl advertising has become almost as important as the game itself, in part because of the huge TV audience the annual event attracts.

Research results, which were recently published in the Journal of Advertising Research, indicate that the average Super Bowl promoted film achieved twice as much first weekend, first week and total U.S. box office revenue than its average non-Super Bowl promoted movie counterpart for the three-year period, 1998-2001. Even when researchers applied more rigorous tests, controlling for release dates and budget size, they found similar results, Tomkovick said.

Tomkovick and Yelkur believe their results will be of interest to marketers, Hollywood studios and corporate America, as well as marketing academics and advertising students. The information can be used to strengthen proposals to buy Super Bowl advertising and will help investors feel more confident that the advertising dollars will pay off. "This is real ammo to recruit studios to advertise during the game," Tomkovick said, noting that Universal Pictures and Buena Vista Pictures are among those who have bought advertising during the 2005 Super Bowl.

Interest in their research will likely grow as the cost of Super Bowl ads continue to climb, Tomkovick said, noting that Fox's record average of $2.4 million for 2005 game spots is a 6.7 percent increase over ads in last year's game.

Super Bowl ad prices have risen each year since 2002, when the average ad cost $2 million per 30-second spot. Rates in 2002 were lower because demand for advertising dropped after the Sept. 11 terrorist attacks. In 2003, ad rates rose 5 percent to $2.1 million and they rose another 7 percent in 2004 to $2.25 million.

Yelkur said the research team decided to focus on movie advertising in part because its previous research showed that new product ads are likely to be more effective when aired during the Super Bowl, and movies by their nature are new products. In addition, the researchers' earlier study, which focused on ad likeability, showed that films and entertainment were among the specific categories positively linked with Super Bowl ad likeability, she said.

"Very little research has been devoted to studying Super Bowl ads and subsequent related market activity," Yelkur said. "After testing several other categories, we settled on movie ads, in part, because reliable revenue data is available in the public domain."

Hollywood began to use the Super Bowl as a major vehicle to launch new movies in the early 1990s, Tomkovick said. At first they ran a couple movie ads during the telecast. Then in 1996, Fox spent $1.1 million to promote the film "Independence Day." The movie achieved total U.S. revenues of $300 million and over $500 million worldwide.

"This was the turning point," Yelkur said. "Movie advertisers en masse realized the benefits of Super Bowl advertising." During 1999-2001, five movies were advertised each year. This increased to nine in 2002 and 10 in 2003.

The researchers examined box office gross revenues, collected from Internet Movie Database Inc. and Variety magazine, for all movies advertised during the 1998-2001 Super Bowls. They compared this data with corresponding data from a random sample of movies that were not advertised during the game over the same time period. They compared first weekend, first week and total U.S. box office revenues. They controlled for movie release dates and got similar results. They further refined their data analysis to include only high budget films.

The findings show that Super Bowl advertised movie revenues were vastly superior to non-Super Bowl advertised movie revenues, Tomkovick said. This suggests that a powerful difference exists between the financial outcomes of movies that use direct Super Bowl ad promotion and those that do not, he said.

The opening weekend revenues for the 18 Super Bowl promoted movies that ran in the 2002 and 2003 games were nothing short of phenomenal, Tomkovick said. Fifteen of the 18 earned the top U.S. Box Office position for their opening weekend. Two came in at the second position and the weakest of the 18 premiered at the No. 4 spot. Even at $2 million per 30-second ad, the cost of the ads was less than 2 percent of the U.S. Box Office gross the movies earned.

Yelkur and Tomkovick caution that running a Super Bowl ad does not alone cause a movie to be successful. Factors like movie type, use of celebrities and target audiences for movies must be taken into account, they said.

"Given the consistency of our findings we can say that, all things being equal, Super Bowl advertised films will outperform non-Super Bowl advertised films," Tomkovick said.

Yelkur said more research is needed to determine the impact of other factors on the success of Super Bowl advertised movies, such as the type of movie and the number of theaters the movies are simultaneously released in.

The researchers have found that in addition to movies, products like snack foods and beverages also benefit from Super Bowl advertising, Tomkovick said. PepsiCo and Anheuser-Busch Cos. Inc. (maker of Budweiser and Bud Light beer) are examples of businesses that spend millions in Super Bowl ads each year, he said, noting that both will advertise in the Feb. 6 game.

Successful ads, regardless of the product, have several common qualities, such as the use of humor and animals, Yelkur said.

The UW-Eau Claire research team is now looking at whether new products introduced during the Super Bowl have a better chance of succeeding than new products not promoted during the championship game. They plan to have results this year

- UW-Eau Claire News Bureau