Super Bowl XLIII: Tech Vendors Pass on $3M Ad Spots
Super Bowl XLIII will kick off on Sunday in Tampa Bay, Fla., the culminating game of a long and grueling schedule created by the National Football League (and a bit of packaged software) just over a year ago.
[ MORE ON CIO.com NFL Schedule, Rivalries and Potential TV Ratings Optimized by Packaged Software | The 10 Best and 10 Worst IT-Related Super Bowl Commercials of All Time (So Far) | How Secure Is All That Wireless Equipment at the Super Bowl? ]
The NFL wouldn't be where it is today (arguably the most high-profile of U.S. professional sports, with some 138 million adults calling themselves fans, according to Scarborough Sports Marketing) without the scores of brand-name companies that sponsor everything from the sideline cups (Gatorade) to the coach's headsets (Motorola).
Depending on the matchups each year, the TV advertisements can be more interesting to watch than the Super Bowl games themselves. Those TV ads aren't cheap: It'll cost brand marketers US$3 million for a 30-second spot on NBC, which is broadcasting the game this year. (And there's debate about just how effective the ads are.) Budweiser, car companies, movie studios, Coke and Pepsi, and mobile device manufacturers are your usual lineup of big spenders.
Since the 1990s, however, it seems like high-tech companies have become more and more a part of the event that is the Super Bowl. The dotcom boom of the late '90s, in particular, thrust the consumer-oriented e-commerce sites (remember the Pets.com and E-Trade ads?) into pop culture and water cooler chatter. ( Investor's Business Daily reported that there were 36 Internet advertisers during the 2000 telecast.)
While the high-tech business elite-Apple, Dell, HP, IBM, Intel, Microsoft, Oracle, SAP, for instance-have made sporadic Super Bowl appearances, they have largely shunned the big marketing opportunity and premium cost of the big game.
Since 1989, here's when those heavy hitters and their stout ad budgets have appeared in a Super Bowl ad: Apple (1999), Dell (2008), HP (2007), IBM ('01, '04), Intel ('97, '98), Microsoft (2004), Oracle (1998), SAP (none), according to data compiled by The New York Times.
How Do You Advertise ERP Software on TV?
One obvious challenge for a company like, say, Oracle or SAP, is trying to position their set of complex products to a mass audience, though EDS's famed "Cat Herders" advertisement in 2000 did an admirable job. (See "The 10 Best and 10 Worst IT-Related Super Bowl Commercials of All Time" to see how tech companies have succeeded or failed.)
For the 2009 Super Bowl, several dotcoms are back in the Super Bowl mix (Careerbuilder.com, Cars.com and E-Trade), but the only company with a TV ad that resembles a high-tech vendor is General Electric, with a 30-second spot touting its Smart Grid technology. (GE owns NBC, so maybe it got a good deal.)
What's interesting is that, according to Scarborough Sports Marketing and Nielsen data, the NFL audience is quite tech savvy. NFL fans (defined as those adults who are "very, somewhat, or a little bit interested" in the NFL) are more likely than the average U.S. adult to have all types of high-tech items in their household, from DVRs and MP3 players to HDTV.
In retrospect, the dotcom bust now seems like "not that bad a time," considering the state of the global economy today and the IT sector, in particular: layoffs and disappointing earnings from Microsoft, facilities closed and layoffs at Intel, Nortel's bankruptcy filing, and layoffs at IBM, which actually had a decent fourth quarter.
Perennial NFL sponsors Sprint Nextel ( layoffs and cost-cutting measures) and Motorola ( more layoffs and disappointing fourth-quarter revenues) are also in tough shape, though they remain committed sponsors-for now.
The NFL isn't alone in IT-related sponsorship challenges. A recent research note from Ovum senior analyst John O'Brien pointed out that Nortel and Indian outsourcer Satyam ( which is in financial crisis) were sponsors of high-profile sporting events: Nortel is a Tier One Partner of the London 2012 Olympic Games, and Satyam is the Official IT Services Provider for the FIFA World Cup in 2010 and 2014.
Nortel, for instance, spent more than $52 million for the London sponsorship, besting Cisco in the process, according to O'Brien. "Nortel is now planning a major restructuring program that will see it reduce its debt mountain and use its $2.4 billion cash fund to preserve its liquidity and fund operations during the restructuring process," O'Brien writes.
How these two instances play out will be interesting, both abroad and in the U.S. "Their crises have been precipitated or, in the case of Satyam, exposed by the global economic downturn, and this is likely to send a warning shot across the entire major events business that could potentially threaten new and existing IT funding of major events programs," O'Brien states. "As such, this is the first example of cracks appearing in the IT sponsorship of major events."