Analysis of Consumers of Super Bowl Telecast - Case Study Example

Consumer Research Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 22nd April, 2015. Introduction Consumers are influenced by many factors in the process of undertaking a decision in the purchase of goods and service. These factors are either influenced the price, product, brand or use of these products. These factors have been tapped and adopted by advertisers or producers in the process of developing rich customer perspectives which were tapped in the promotion or sale of these consumer products. Super Bowl is the largest single event with millions of viewership across the United States with Super Bowl Sunday attracting around 54% viewership of all US Television viewership. This analysis will look into the effect of Super Bowl Ads on consumer behaviour in relation to well known US beverage brands i.e. Budweiser, Corona, Pepsi and Coca-Cola. Literature Review NFL’s Super Bowl telecast is a premium act that attracts a lot of interest from companies, viewers and other related stakeholders. It presents the largest advertising event for the year and thus an opportunity for corporate brands to sell their products. Adverting in the Super Bowl significance is highly rated leading to advertisers forking out millions to secure Ad slots within different TV networks. A 30 second ad slot during the Super Bowl Super Sunday costs around $ 5 million thus locking this premium advertising services to select brands. According to the Nielsen Ratings, Super Bowl games generate a 40 rating and 60-share which translate to over 100 million viewers within the United States alone. In the year 2015, over 114 million viewers turned to watch the Super Bowl Sunday and the season has recorded average highs of around 168 million viewers. Research has shown that the biggest spenders within the NFL are Anheuser-Busch (Budweiser) and PepsiCo. These are well known brands to customers in terms of taste and existence and thus outlining the purpose or motivation for these brands to spend huge funds on sporting activities is raised. Studies into TV advertising have shown the tendency for media planners to ensure that ad exposures are concentrated towards their target market. For example, consumers and fans of the Super Bowl are driven by the need to watch their teams compete in one of the greatest events on Television (Bertrand 2010, p. 81). As a result, the potential for advertisers is huge since NFL Teams’ fan bases are spread across the United States providing a huge marketing arena. The existences of advertising opportunities that can create brand capital are quite rare and thus, events such as the Super Bowl games are highly anticipated among different advertisers and brands. An example of increased viewership was witnessed in the 2011 season, when Green Bay Packers returned to the NFL after a 13-year lull, an additional 14% of Milwaukee residents tuned in to watch the game. As a result, more Wisconsinites and Packers fans were exposed to perpetual advertisers such as Budweiser, Dr. Pepper and Pepsi. The effect of having exposure to a great number of viewers lies with the fact that these companies should be able to turn its adverts into sales (Shimp 2013). The ability to leverage viewership and adverts in the process of marketing is a great idea that is being explored in sports as witnessed by data from Super Bowl. A Super Bowl dataset research undertaken in the past outlines the research on 200 media markets in the United States in conjunction with 6 years of Super Bowl data from Nielsen. The research has shown that advertising in the Super Bowl has great effect on increasing revenues and spending per household. Data from the 2013 NFL season shows an increase of around 10 to 15 percent within the 8 weeks following the start of the NFL season. This data represents a return on investment of around 150 to 170 % for a brand but these numbers decline significantly when a competitor advertises during the NFL season. This comparison is undertaken when we consider companies such as Pepsi and Coke revenue figures versus its adverting spend over a given period. According to Dhar (2009, p. 94), the revenues and expenditure across different homes for products advertised during Super Bowl games increased significantly compared to other periods. Advertising opportunities such as the Super Bowl games present companies especially in food and consumables section an opportunity to sell its products. There is evidence to suggest that Super Bowl advertising presents an opportunity for complimentary between these brands and the potential consumption occasions. During the airing of Super Bowl games other activities and events occur such as the airing of NCAA games and major purchases are undertaken within this period. Data has been collected to compare the complementary of brand between viewership and tournaments such as NCAA basketball. The data suggests that there is a strong determinant that the Super Bowl games have a large effectiveness in increasing revenues. Becker & Murphy (2012, p. 74) propose that advertising complements consumption which is consistent with the finding of the Super Bowl study. This is because advertising creates assists in building the complimentary between the brand and something else which customers use while spending time watching games. For instance, snacks such as Doritos and beverages such as Pepsi, Coke or Budweiser go together creating complimentarily. The volume and viewership of the Super Bowl is enormous and therefore, there is a need to create complimentary of brands since sports is a valuable component in the society. Super Bowl ads have become so popular that NFL fans tune into most of these games to watch the ads especially during Super Bowl’s Super Sunday. Nielsen’s research revealed that in 2010, around 50% of Super Bowl viewers tuned in to watch the commercials. Therefore, advertisers have to find a way and method of getting their message to the consumer through the use of different perspectives. The context used in creation of the Super Bowl Ads plays an important role in developing a complementary role. For instance, soda brands such as Pepsi and Coca-Cola ensure that the adverts utilized in the Super Bowl emphasize on energy and support for sporting (Shimp 2013). This is in contrast to beer ads which develop a different context in the process of undertaking advertising. For instance, Corona beer utilizes its affection to good moments between couples and therefore, it makes use of couples undertaking an advert at the beach. Unlike Budweiser which has in recent ads come up with the phrase “Grabbing some Buds” to derive a context of catching up with some friends and sharing a beer (Bertrand 2010, p. 77-79). Therefore, it can be concluded that brands sales are influenced by the changes in demand for the complimentary activity even when the advertising is fixed. The task of measuring the effect of advertising based on context should be measured against other adverts developed through use of different contexts. The study of effect of adverts on change of sales requires the deployment of large sample data from different sources. However, study by Lewis & Riley (2013, p. 59-63) has shown that the utilization of TV adverts in the past has been able to achieve the 80% of confidence levels among different consumers. However, the variations of results and date emanating from different sources point out the effectiveness of advertising sources such as TV, direct e-mail marketing and other sources. Data points out that there are exogenous differences in the data and reliability of data provided as it concerns TV marketing and sales. Despite the differences and reliability of TV data, Super Bowl overcomes these shortcomings since it has large potential effects and market data which included millions of households while shifting away from the variability of sales that is usually observed from a cross-section of household level sales. Several studies have been undertaken on the effect of Super Bowl ads and it reflects a spike in viewership and ratings upon seconds of airing. However, this data does not imply direct sales effect while at the same time it does not reflect the desires to see ad again or follow-up on something from this ad (Marla 2014). In order to better analyze and draw an inference on the effect of the Super Bowl and NFL ads in influencing consumer behaviour, a research study of consumer was undertaken during the NFL season. Public data from Nielsen was obtained from 56 Designated Market Areas (DMAs) over a period of NFL seasons. Moreover, data was collected from Ad-Views database thus pushing the number of selected markets to 195 with provision of weekly data on advertising exposures of the market to NFL broadcasts. The data analyzed from the Super Bowl were from the 2006 to the 2011 period with emphasis on the major brands such as Budweiser and Pepsi. Budweiser’s parent company Anheuser-Busch spent the most as per data of the time period under review. The company was followed by Pepsi which undertook advertising in the Super Bowl with exception of the years 2007 and 2010 when the company did not undertake any advertising (Lewis 2013, p. 58-62). Coco-Cola also advertised during this period except for 2007 through to 2011 and thus, there is no variation on the companies which advertise in the Super Bowl within this period. When the data is arranged and tabulated, we get a chart of all of the top 56 DMAs as obtained from Nielsen in relation to exposure to Super Bowl ads. From the figure 1 in the appendix, we see that all the DMAs have been arranged based on average ratings in the bottom (Becker 2012, p. 72). The chart highlights that the average rating for a DMA stood at 45.3% of the market viewing the Super Bowl while the cross section of the market varied between 36.4% and 53.4%. The dots above the chart measure the variation from the average DMA ratings from left to right while the DMAs are arranged from left to right based on increasing variation. The variance in terms of points for the DMA varies greatly from the average ratings of 47.7%; we witness a change of around +/- 2.5% with most DMAs witnessing having a dispersion rate of 10 points or more. The highest DMA dispersion rate is that of 17 points and other rating and points point out the number of people watching or getting exposed to the Super Bowl ads. The high variation between DMAs is based on several factors such as team liking numbers, local DMA preferences or the likability of teams after matches have been played. The DMAs data is compared to the other data from the retail stores whereby unit sales and prices are aggregated and collected based on the top brands. In the beer section we collected data from Budweiser, Miller, Coors and Corona since they represent the highest impressions during NFL games (Marla 2014). This data is measured and undertaken based on sales and revenues from the majors stores located across the United States. In contrast to other brands such as Dr. Pepper which advertise in the Super Bowl, the brand familiarity and ratings of big brands such as Pepsi and Coca-Cola assists greatly in aiding sales. Consequently, research should be undertaken to determine the effect of brand power in affecting sales of products or decision of consumers making buying decisions. Critical Evaluation Information from the literature review points to a trend of appeasement whereby well known brands utilize a sporting event(s) to emphasize the importance of purchasing its products. However, these products are already well known products used widely across the market. The main aim of advertising these products at the Super Bowl is to create an associative attachment with the use of these products and ensure that an irresistible appeal is created for the customer. Super Bowl ads have become so addictive that in the 2015 Super Sunday game, more people tuned in to watch the ads more than the game based on Nielsen ratings. The Super Bowl’s half time shows have been a huge success for companies who advertise within this segment or time slot (Bagwell 2009, p. 51-53). Watching NFL games is social events since a lot of Americans watch the games with family, loved ones or their buddies. As a result, advertisers want to create a positive mood for the fans and viewers on TV. Research undertaken on the ability of Super Bowl ads show that more people love to be entertained during NFL games. As a result, advertisers make sure that people are able to feel good when watching these games. Consequently, Super Bowl ads are meant to create lasting impressions on consumers and affirm their brand power during these highly watched events. According to Wenner (2009, p. 93), Super Bowl ads connect with consumers on a psychological level and thus it assists in creating brand impression on people. Psychologists have undertaken studies to look into the effect of Super Bowl advertisements and major sporting activities in affecting the purchasing power of consumers. They have outlined several conclusions in relation to the psychological effect of Super Bowl ads as outlined; a) Super Bowl ads are created to tap into emotional state of viewers with emphasis on promoting positive emotions. For instance, Coca-Cola Super Bowl ads outline the positivity of sharing a Coke with family members. While, Budweiser cultivates on friendship as well as love for the game and therefore, viewers are likely to purchase and associate themselves with these positive emotions (Coombs 2014). b) Familiarity of Super Bowl ads and brands advertising in the NFL games ensures that brand loyalty is built over a period of time. Major Super Bowl advertisers such as Pepsi and Budweiser are common among viewers of NFL games. As a result, a culture of viewers with their favourite products watching an NFL game has become quite common. Moreover, a new culture of NFL games being connected with famous brands such as Budweiser, Corona and Pepsi has developed over time (Sahni 2013). Consumer psychology effect on the Super Bowl games has been researched widely by different people within different sectors. O’Guinn (2008, p. 112), outlines that the Super Bowl has a great effect on affecting purchasing power of viewers as noticed by data from pre and post season of the NFL games. Based on the revenues and profits generated by brands during the NFL season, there is believed that indeed buying psychology is utilized by advertisers during the NFL season. However, researchers in the field of advertising especially in relation to Super Bowl have overlooked the issue of brand power and the quality of advertised products in relation to its substitutes. For instance, Coca-Cola and Pepsi are market leaders in the carbonated drinks section in various global jurisdictions. Hence, a study is supposed to be undertaken to determine the effect and level of brand power in determining the sales units that can be realized without the effect of massive sporting events such as Super Bowl. Such a research would unearth the potential and power of big brands affecting the purchasing decision of a majority of consumers (Becker 2012, p. 69-70). Proposal for Study Sports have the capability to attract huge people and create huge fan bases which ensure sporting teams develop hugely successful franchises. However, it is the personality factor within a sporting team that stands out within a team on most occasions rather than team success. The success of a sportsman or sports personality assists in the development of certain sports or teams. For instance, the success of Michael Jordan created a huge fan base for the NBA star during his playing days and after his exit out of the NBA. Personality effect across the sporting field is huge and it assists in creating a phenomenon that leads to creation of personal brands (Sahni 2013). The success of certain sportsmen has created a huge following among its fans and thus, marketing firms, advertisers and sports teams are out to create utilize or create the next sports stars. The effect on these famous sportsmen is the effect they have on changing attitudes towards certain brands (Bagwell 2009, p. 47-48). For instance, Michael Jordan in conjunction with Nike created ‘Air Jordan’ snickers which are a major selling point for Nike. Other well known sports personalities who have an effect on major brands include; Cristiano Ronaldo, Tiger Woods and Usain Bolt. The major factor behind their personality effect on brands is based on success and personal exploits in the sporting field. As a result, major teams and brands have signed contracts with these sportsmen with a major pay off of brand awareness and increased sales. The effect these sportsmen have on major brands is phenomenal as witnessed by the success of Air Jordan shoes which have grossed over $ 1 billion since inception (Coombs 2014). The endorsement of brands by these sportsmen can fetch companies over $ 100 million per year. Consumers want to be associated with success and therefore, they draw motivation from these sportsmen since they represent the struggles and success of the human effort. Consumers are heavily influenced by positive messages and emotions which affect their support for a certain cause or personality. Most of these sportsmen were ordinary people in the past and thus their success motivates consumers to appreciate their accomplishments and efforts within the sporting field. The link and connection between the consumer and these sportsmen is that the love for sports and the message of hope that these sportsmen convey to their fans and consumers. The emotional perspective advertisers utilize in branding or marketing through personalities is an effective strategy for brands. Since personal touch and connection is required between the personality and the brand then it is imperative for these sportsmen to be involved in the brand activities (Hitsch 2011, p. 122-129). For example, these sportsmen usually attend jersey unveiling and other activities which assist in bolstering sales across the board. As a result, they create a lasting attachment with consumers which is easily unbroken. For instance, when Cristiano Ronaldo changed football clubs, his shoe endorsement with Adidas continued to fare well with consumers. This study will be undertaken though collection of data and revenues from sports merchandise stores. This data would present a true picture of the effect of sports personalities on the influencing brand power. References Bagwell, K 2009, “The Economic Analysis of Advertising,” Handbook of Industrial Organization, vol. 3, pp. 45-59. Becker, G & Murphy, K 2012, “A Simple Theory of Advertising,” Quarterly Journal of Economics, vol. 108, no. 4, pp. 67-72. Bertrand, M., et.al. 2010, “What’s Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment,” The Quarterly Journal of Economics, vol. 125, no. 1, pp. 76-84. Coombs, D & Sarver, B 2014, We Are What We Sell: How Advertising Shapes American Life. . . and Always Has. ABC-CLIO, Sydney. Dhar, B & Dubé,P 2009 “Brand History, Geography, and the Persistence of Brand Shares,” Journal of Political Economy, vol. 117, no. 1, pp. 87-115. Hitsch, G & Manchanda, P 2011 “An Empirical Model of Advertising Dynamics,” Quantitative Marketing and Economics, vol. 3, no. 2, pp. 107-144. Lewis, R & Riley, D 2013, “Down to the Minute Effect of Super Bowl Advertising on Online Search Behavior,” Journal of Electronic Commerce, vol. 9, pp. 56-64. Marla, R, Royne, ‎B & Carlson, L 2014, Advertising and Violence: Concepts and Perspectives, Palgrave, London. O’Guinn, T, ‎ Allen, C & Semenik, R 2008, Advertising and Integrated Brand Promotion, John Wiley & Sons, New York. Sahni, N 2013, Effect of Temporal Spacing Between Advertising Exposures: Evidence from an Online Field Experiment, Routledge, Lowell, MA. Shimp, T & Craig, J 2013, Advertising Promotion and Other Aspects of Integrated Marketing Communications. Cengage Learning, Boston: MA. Wenner, L & Jackson, S 2009, Sport, Beer, and Gender: Promotional Culture and Contemporary Social Life. Peter Lang, Chicago. Appendix Figure 1: Showing Ratings by DMA of Super Bowl Games: Average and Year-Specific Deviations Read More