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Marketing Research Team Finds
Super Bowl Ads Pay Off for Hollywood

 MAILED:  Jan. 16, 2004

EAU CLAIRE — Super Bowl advertising has become almost as important as the game itself, in part because of the huge TV audience the annual event attracts. Since 2000, advertisers have spent an average of over $2 million for 30-second ads in these games. The question is often asked: “Are these ads worth it? Do they pay off in terms of revenues?”

Marketing researchers at the University of Wisconsin-Eau Claire have determined that Super Bowl ads do pay off, at least from the Hollywood movie industry’s perspective. The team of faculty and student researchers recently completed work on what is the first known Super Bowl advertising effectiveness study of its kind. Their work will be published in the Journal of Advertising Research this year.

“All else being equal, we know from this study that spending $2 million for a movie ad in the Super Bowl will pay off,” says Dr. Charles Tomkovick, professor of management and marketing, who studied the topic with Dr. Rama Yelkur, associate professor of management and marketing, and marketing student Patty Traczyk, a May 2002 graduate who is now a marketing specialist with Hormel.

Results 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 the team applied more rigorous tests, controlling for release dates and budget size, they found similar results.

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.

Yelkur said they decided to focus their latest study on movie advertising in part because their 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 always new products. In addition, the previous study, which focused on ad likeability, showed that films and entertainment were among specific categories positively linked with Super Bowl ad likeability.

“But very little research effort 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. Movie advertisers en masse realized the benefits of Super Bowl advertising,” Yelkur said. During 1999-2001 five movies were advertised each year. That increased to nine in 2002 and 10 in 2003.

The team examined box office gross revenues, collected from both the Internet Movie Database Inc. and The 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 Super Bowl over the same time period. They compared first weekend revenues, first week revenues 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 in all cases show that Super Bowl advertised movie revenues were vastly superior to non-Super Bowl advertised movie revenues. This suggests that a powerful difference exists between the financial outcomes of movies that utilize direct Super Bowl ad promotion and those that do not.

The opening weekend revenues for the 18 Super Bowl promoted movies that ran in the 2002 and 2003 games are 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 number four spot. Even at $2 million per 30-second ad, the cost of these ads was less than 2 percent of the U.S. Box Office gross that the movies earned.

In their manuscript to be published next year, Yelkur and Tomkovick caution readers to be careful not to conclude that simply running a Super Bowl ad causes a movie to be successful. Other factors such as movie type, presence of a celebrity, and the target audience for a movie need to be taken into account.

“However 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 says that 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.

“We would like to continue by looking at other special event advertising and extending our work internationally,” Yelkur said. “We want to link our likeability and effectiveness studies even further.”

The team hopes their research will encourage advertising agencies, market research firms and other academics to conduct advertising effectiveness studies of their own and to share their results.

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JW/JB


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Updated: January 16, 2004