Budweiser’s Decision Not To Air Super Bowl Ads Aligns With Maximizing Value Creation
BY ADAM GROSSMAN
The biggest off-field news for Super Bowl LV is Budweiser’s decision to not advertise during the game. Instead the company is donating “to the Ad Council and COVID Collaborative to raise awareness of the Covid-19 vaccines.”
One of the Super Bowl’s historically largest advertisers choosing not to spend during the biggest sporting event of the year appears to be a giant knock against the sponsorship industry. A closer examination, however, demonstrates that Anheuser-Busch’s (A-B) strategy is both what one would expect and aligns very well with maximizing value creation from sponsorship.
While many companies are reconsidering ad spend in a COVID-19 dominated environment, A-B’s decision to not advertise Budweiser during the Super Bowl is arguably the most important development. Not only did the company spend $41 million on commercials last year but also, as we have highlighted, research found that Budweiser generated $45 million in direct revenue from its Super Bowl advertising in past years on far less than $41 million in spend.
This development makes more sense when considered in the context that A-B is still spending significant ad dollars on the Super Bowl – just not on Budweiser. Instead, “Bud Light, Bud Light Seltzer Lemonade, Michelob Ultra and Michelob Ultra Organic Seltzer will each have a spot.” The four minutes in ad time A-B purchased will mean A-B will likely spend as much if not more than in previous years on Super Bowl ads across six brands.
More importantly, A-B’s decision to not spend on Budweiser and focus on these brands aligns with its own performance-based strategy that we have highlighted in past posts. Then A-B InBev Vice President of Partnerships Nick Kelly articulated that strategy as “Our commitment is that we’re not going to pull money out of sponsorship, but you may see us shift where exclusivity is vital and where it’s not.”
The primary reason Super Bowl’s ads are often considered expensive (this year a projected $5.5+ million for a 30-second spot) is that the there is a massive, live audience consuming the game. The 100+ million people who watch the game annually makes the Super Bowl typically the most watched show of the year.
Reaching a large audience, however, is not equally valuable to each company because different companies have different revenue and brand goals. We use our Corporate Asset Valuation Model (CAV) with our clients to determine which companies, products, and goals benefit from reaching this large of audience.
Value from reaching a large audience with a sponsorship or advertising activation is often maximized in two use cases applicable to A-B and Budweiser. It is either from companies with low brand exposure with their target audience or well-known companies looking to launch a new product. Our standard CAV analysis calculates the exact value of these lifts in brand awareness and perception in these contexts for our clients.
While Budweiser is well known to its target audiences, the other A-B brands are not as well known. In addition, Bud Light Seltzer Lemonade and Michelob Ultra Organic Seltzer are newer products that have different target audiences than Budweiser. We discussed A-B’s strategy to use sponsorship to more effectively enter the hard seltzer market in a previous post.
We did not speak with A-B about this year’s Super Bowl and do not know if it used this type of analysis in its decision-making process. It is also laudable that A-B made the decision to support the Ad Council and COVID Collaborative.
However, the headlines about A-B’ decision on Super Bowl spend require closer examination. In particular, its decision to focus ad spend on newer brands and products should be the best approach to maximizing its Super Bowl return on investment.