Analyzing Anheuser-Busch’s Super Bowl Spend
BY ADAM GROSSMAN
Last year Anheuser-Busch announced a “revolutionary incentive-based sponsorship model.” One of the biggest questions became how would the company’s enhanced focus on tangible ROI and ROO metrics potentially change its spending on sports assets.
This year’s Super Bowl provides new answers to these questions. One of the dominant narratives around this year’s events is that television ad prices have “stalled.” More specifically, 30-second commercials for this year’s Super Bowl are priced at or near the same level as last year’s Super Bowl. The $5.2 million average price point is the first time the spots have not increased in year-over-year price since at least 2010.
The primary reason for the ad prices remaining the same is that the television audience of 103.4 million viewers was also the lowest number since 2010. It therefore may be surprising to see that Anheuser-Busch is making “its biggest media spend for the event to date.” This includes buying five-and-a-half minutes of airtime during the Super Bowl which equates to an estimated $28.6 million.
Why is the company increasing its spend at a time when it seems like viewership has declined? The answer likely comes from the company’s reliance on tangible ROI metrics. In particular, Block Six Analytics (B6A) has featured research in a past post that has shown that the company has generated $45 million in direct revenue from the Super Bowl with increases occurring before, during, and after the event.
Anheuser-Busch is a leader in sports sponsorship and its strategic decisions reverberate throughout the industry. One of the “fears” about Anheuser-Busch’s new approach was that an incentive-based model would drive a decrease in its overall spend. More specifically, conventional wisdom is that companies have spent sponsorship dollars in the past because they have a “gut feeling” that these activations work. Actually measuring the impact of sponsorship would directly challenge this assumption and may lead to companies finding that they were not receiving the expected ROI.
Anheuser-Busch’s approach shows the benefits of measuring sponsorship ROI and why spending can increase through its new approach. More specifically, the company chose to increase its Super Bowl spend because it had clear evidence that this spend should have a direct impact on its top-line revenue growth before, during and after the event. The company will generate a higher than expected ROI because the cost of commercials will remain flat so it can buy more ads for less money. This year’s Anheuser-Busch Super Bowl strategy of buying more commercials even if viewership has declined appears to be in direct alignment with an incentive-based sponsorship model.
Anheuser-Busch’s approach also shows that ROI does not mean that a sponsorship asset necessarily needs to generate the highest number of impressions. The reach of a sponsorship is an important metric and Anheuser-Busch is still benefiting from advertising during what should the most widely viewed television program this year. The key for buyers in the future should be the quality or value of the audience to their company (not just the size of the audience) and how an increased spend can lead to an increase in ROI or ROO.
Anheuser-Busch also shows that it is critical to evaluate the impact of sponsorship outside of the initial activation and across multiple channels. More specifically, Budweiser sales increased in the eight weeks following the Super Bowl and around the NCAA tournament only when it was the sole or primary advertiser during the Super Bowl. That is likely because Anheuser-Busch customers were seeing content about the advertisements before, during, and after the game across multiple channels including traditional, digital, and social media.
Evaluating tangible ROI and ROO in multiple channels is at the core of B6A’s Partnership Scoreboard. Our cross-channel dashboard provides buyers and sellers of sports sponsorship with specific ROI and ROO insights before, during, and after events by leveraging our Corporate Asset Valuation Model (CAV). This model is built to tell specific companies the impact that specific activations should have based on how the company generates revenue and on realizing its brand goals. Our machine learning platforms enable us to track the impact of these activations in owned and earned channels to provide our clients with near real-time analysis.
The key insights generated from the Partnership Scoreboard highlight to buyers and sellers of sports sponsorship what works. It is critical to note that companies should and likely will spend fewer dollars on sponsorship activations where they do not see or cannot determine how ROI and ROO are being generated. However, the converse should also be true in that companies can and should spend more money on activations that clearly work for their business. Anheuser-Busch’s spend during the Super Bowl is a clear demonstration of how a new incentive-based model for sports can help all parties generate revenue growth.