Financial Impact of Super Bowl Ads: $7 million for 30 seconds

Super Bowl, the NFL's annual extravaganza, captivates almost the entire country with touchdowns, tackles, and half-time shows. But, another high-stakes game quietly unfolds behind the scenes—the battle for consumer attention and its translation into hard cash among advertisers. Does this sports marketing spend justify the associated costs? Here’s what the stats look like!

Beyond the gridiron glory, the Super Bowl serves as a battleground for companies vying to showcase their brands to a large audience. With a 30-second ad slot commanding $7 million, many would expect its economic benefits also to be huge!

Yet, the impact, especially for advertisers like Budweiser, Doritos, etc. lasts hardly for a few weeks. For media corps like Fox, Super Bowl ads bring a cheer to their otherwise flagging TV revenues.

In this article, we delve into the dynamic world where touchdowns meet cash flow, exploring how airing advertisements during the Super Bowl influences revenues, cash flow, and working capital metrics for diverse companies. Strap in as we dissect the economics behind the NFL's grandest stage.

Power Players: The Regular Super Bowl Advertisers

Despite the hefty price tags, numerous brands consistently showcase their advertisements during the Super Bowl, creating a lasting impact on social media and serving as case study material.

Here’s a look at some of the regular advertisers by industry.

Alcoholic beverages	Food & beverages	Auto industry	Tech
Anheuser-Busch (also called AB InBev and maker of Budweiser, Bud Light and Michelob), Diageo, Heineken, Molson Coors	PepsiCo, Frito-Lay Doritos, Coca-Cola, Cadbury’s Oreo, Snickers, Lindt, McDonald’s, Uber Eats, Popeyes	Kia, Toyota, Ford, General Motors, BMW, Volkswagen	Apple, Google, Netflix, Amazon, Meta, Tubi

Do Super Bowl Ads Drive Revenue?

Countless studies have attempted to decode whether high-stakes Super Bowl commercials truly pack the financial punch they promise. Yet the findings remain as varied as the plays on the field, leaving the mystery behind Super Bowl ads’ financial success shrouded in ambiguity.

We analyzed the quarterly results of five Super Bowl advertisers (AB InBev, PepsiCo, Coca-Cola, McDonald’s, Ford) to track revenue surges and fluctuations in receivables and payables during the Super Bowl quarter (Q1), as well as the preceding and subsequent quarters.*

Of the five companies under our microscope, three (AB InBev, PepsiCo, McDonald’s) showed little to no uptick in revenues during the pivotal Q1 period, coinciding with the Super Bowl frenzy, compared to the previous quarter (October – December). Meanwhile, the remaining duo experienced modest growth ranging from 3% to 8%—a seemingly ordinary fluctuation in the sales cycle.

Conversely, all five companies we examined exhibited notable revenue growth from Q1 to Q2, with increases ranging between 8% to 21%. This trend likely suggests a broader pattern of heightened consumer spending as the year unfolds, rather than a direct influence from Super Bowl ads.

More at stake: Brand recall, stock prices, and market share!

Does the lack of significant impact on quarterly revenue signal that brands should hit the pause button on their Super Bowl ads? 

It’s a tantalizing question, especially when you consider that a mere 30-second slot commands a staggering $6.5 to $7 million price tag (see graph), not to mention the hefty expenses incurred in crafting the ad itself.

But there’s also more at stake!

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The Benefits of Super Bowl Sports Marketing

While the impact on overall quarterly revenues may appear negligible, studies have revealed a clear and significant short-term spike in sales, particularly evident in the food and beverage industry.

According to the US Chamber of Commerce:

• 77% of Americans (~118 Mn) will be watching the Super Bowl in 2024
• Total spending by consumers to touch $17.3 billion, with 80% of it in the food and beverages segment
• 20% increase in beer sales during the Super Bowl

Other studies point out that Super Bowl ads drive demand up by an average of 6%, increase online and social media interactions with the brand, raise share prices, and increase brand awareness (see graph and table below for more details).

Super Bowl advertisements as a whole were mentioned on Twitter 312,000 times during the game, which equates to 1,300 mentions per minute.

Challenges to Super Bowl Sports Marketing

Amidst the post-COVID-19 landscape and the lingering economic uncertainties of recent years, Super Bowl advertising has encountered a turbulent shift. The prices for Super Bowl ads in 2024 echo those of 2023, hinting at a palpable hesitancy among brands to dig deeper into their pockets.

It’s also interesting to note that Gen Z has been impacted the least (in terms of demand generation) by Super Bowl ads (see graph above).

Other studies suggest that:

• When two competing brands in the same industry (e.g. Cola and Pepsi in the soda industry) air during the Super Bowl, they make no substantial gains on their investments
• Non-advertisers in the same industry as an advertiser (e.g. Corona Extra in the beer industry) also tend to get an increase in sales (4.2% in 2023 according to a study) during and for a short time after the Super Bowl

Many automakers including Ford, GM, and Stellantis are stopping their Super Bowl advertising, with Ford’s CEO even saying that “the huge cost of Super Bowl advertising is a poor use of spending.”

Many others including Budweiser’s parent company AB InBev are cutting down their Super Bowl spending to optimize their sports marketing budgets, despite some of the previous years offering a 15%+ surge in Budweiser consumption per household in the weeks after the event.

Annouar El Haji, CEO of Veylinx, summarizes well when he says:

“It’s not really a surprise to see that Super Bowl ads improve sales, but the short-term bump alone may not be enough to justify the $7 million price tag.“

Working Capital Metrics and the Super Bowl Impact

Similar to the revenue numbers, we noticed little to no effect of Super Bowl advertising on the Accounts Receivables (AR), Accounts Payable (AP), DSO, and DPO of the companies.

Here’s a look at how the AR and AP changed for the companies between Q4 2022 and Q1 2023.

	Accounts Receivable % Change		Accounts Payable   % Change
	Q4 ‘22 – Q1 ’23	Q1 ‘ 23- Q2 ‘23	Q4’ 22 – Q1 ‘23	Q1 ‘23 – Q2 ‘23
PepsiCo	3.0%	9.4%	(7.8%)	2.1%
Coca-Cola	31.9%	(13.7%)	(1.0%)	5.7%
McDonald’s	(1.9%)	(2.9%)	(28.5%)	(21.5%)
Ford	(5.1%)	5.7%	(17.2%)	(0.7%)

The decrease in accounts payable (AP) across firms in Q1 is likely attributed to the expedited clearing of pending payment dues from the previous year. 

The variation in accounts receivable figures across the quarters was in single digits for all firms except Coca-Cola, indicating seasonal variations and company-specific issues alone.

In terms of DSO and DPO too, any conclusive effect of an extravagant marketing spend could not be judged at least in the immediate financial quarters. Here’s also a quick view of how DPO and DSO changed for the different firms.

	Days Sales Outstanding (DSO)		Days Payable Outstanding (DPO)
	Q4’ 22 – Q1 ‘23 change	Q1 ‘23 – Q2 ‘23 Change	Q4’ 22 – Q1 ‘23 change	Q1 ‘23 – Q2 ‘23 Change
AB InBev	1 day  ↑	16 days ↑	5 days ↑	44 days ↑
PepsiCo	16  days ↑	3 days ↓	71 days ↓	83 days ↑
Coca-Cola	1 day ↑	1 day ↓	5 days ↓	82 days ↑
McDonald’s	2 days ↑	2 days ↓	1 day ↑	2 days ↓
Ford	1 day ↓	1 day ↑	4 days ↑	2 days ↓

In absolute values, the change in both DPO and DSO was minimal (+1 to 2 days) for McDonald’s and Ford across all three quarters. 

For the other food and beverage brands, the change in DPO was less during Q4 – Q1 compared to the jump (50+ days) experienced in DPO during Q1 – Q2. The DSO values fluctuated less compared to DPO.

The Super Bowl is a lifeline for media companies like Fox

While advertisers splurge money for a spot during the Super Bowl live telecast, we expected media companies to make a windfall.

In Fiscal 2023, Super Bowl LVII was one of the biggest drivers of Fox Corporation’s revenues. 

While revenues grew by 4% in the January – March 2023 quarter compared to the same period in 2022, it was still less than the October – December 2022 quarter. For most media corporations, Super Bowl ad bookings close by September – November and the revenues from it get recognized in Q3 (July – September) and Q4 (October – December). 

Accounts receivables were also lower in Q1 compared to Q4 by 9% (see table). The decrease in accounts receivables in Q1 could be because of advertisers paying up for the slots before D-day. The Days Sales Outstanding for Fox Corporation averaged around 65 days.

While Fox Corporation raked in almost $600 million (~10% of all its advertising revenue in fiscal 2023) from Super Bowl ads, CEO Lachlan Murdoch admits that “the money came in late for Super Bowl advertising, so we had some nervous moments.”

Paramount (owner of CBS and Viacom) also had similar trends in its revenue and accounts receivable as Fox Corporation. It registered a 15-day increase in DSO between the quarters Q4 2022 and Q1 2023 while its accounts payables dipped by 12% (see table).

In 2024, Paramount is expected to rake in one of the highest dollar figures ever from Super Bowl advertising.

	Revenue  (% change)		AR (% change)		AP (% change)
	Q4’ 22 – Q1 ‘23	Q1 ‘23 – Q2 ‘23	Q4’ 22 – Q1 ‘23	Q1 ‘23 – Q2 ‘23	Q4’ 22 – Q1 ‘23	Q1 ‘23 – Q2 ‘23
Fox Corporation	(11.3%)	(34.7%)	(8.8%)	(20.1%)	(13.5%)	(5.7%)
Paramount (CBS)	(10.7%)	4.6%	0.5%	(3.5%)	(12.0%)	(2.0%)

Conclusion: The worth of $7 million for 30 seconds

While CFOs may raise eyebrows and scrutinize the hefty investment in Super Bowl ads, for marketers, it represents a golden opportunity to cast their net wide.

The enduring allure of Super Bowl ads, particularly the standout ones, reverberates across social media channels for several weeks, amplifying brand awareness and likability. They also yield tangible benefits, especially in the short-term in terms of stock market gains and an uptick in market share.

On the other hand, for media conglomerates like Fox and Paramount, the Super Bowl serves as a lifeline for their flagging TV segment revenues, driving up viewership to unprecedented heights (Super Bowl LVIII had a record-breaking 123 million viewers). 

Super Bowl ads, thus, offer a long-term benefit to media corporations while for the advertisers the economic advantage is often limited to just a few weeks. 

While the direct impact on quarterly revenues for associated companies remains elusive, the broader fiscal year’s performance, particularly for broadcasters, hinges on their ability to monetize ad slots during the Super Bowl frenzy. 

In essence, the Super Bowl isn’t just a game; it’s a high-stakes spectacle that shapes the fortunes of marketers, media moguls, and brands alike.