For a small company, GoDaddy has had a large role in the ongoing evolution of Super Bowl commercials. Now could it push the role of commercial production?
The Scottsdale, Ariz., registrar of web-domain names wants to take in-house advertising to a new level. The company has developed its Super Bowl commercials and other ads under its own roof since 2005, but it has hired production firms and other personnel as the case mandated. Now GoDaddy has finished construction of its own 4,000-square-foot studio, the better to help it as it prepares to advertise overseas. The company has shot a new ad slated to air during the Indianapolis 500 featuring Danica Patrick, one of its so-called GoDaddy Girls.
GoDaddy often generates attention in inverse proportion to its size.
The company's decidedly low-fi Super Bowl ads raise hackles by focusing on scantily clad women sauntering about in spots whose production values aren't quite on the level of, say, Pepsi's famous Britney Spears extravaganza or Apple's memorable "1984" classic. And yet, said Bob Parsons, the company's CEO, GoDaddy laughs all the way to the bank.
Most recently company Mr. Parsons raised hackles elsewhere by posting a video of himself shooting and killing an elephant in Zimbabwe.
On the whole, however, GoDaddy has become an advertiser worth tracking, not least because it has been able to put a face on the abstract business of registering domain names, largely through Super Bowl commercials and a few other promotional roosts. What's more, it has done so with efforts that seem exponentially less expensive than those by more mainstream members of the Super Bowl ad roster. GoDaddy's paid media spending pales in comparison to Procter & Gamble or Coca-Cola. Indeed, the company spent only around $31.4 million on media time and space in 2010, according to Kantar Media. In contrast, P&G spent around $3.1 billion last year, according to Kantar.
"The edgy ads pull 10 times better in terms of response," Mr. Parsons said in an interview. "If you were in my position, what would you do?" According to Nielsen, GoDaddy.com experienced a 41% increase in unique U.S. visitors in the week following this year's Super Bowl compared to the week before the broadcast on Fox.
Now Mr. Parsons and his crew think they have hit upon another way to be efficient. Rather than living more luxuriously and hire outsiders to help transform ad concepts into actual video content, GoDaddy will operate its own facility. GoDaddy will now operate its own complex, Mr. Parsons said, replete with "a big workshop for prop storage and set building, full hair, makeup and wardrobe suites, a green room, catering kitchen, post-production facility and design suite, editing suites, a 5.1 surround-sound audio room and production offices." As a result, he said, GoDaddy will save anywhere from 40% to 80% or more.
The company has already saved significantly by handling some work itself; Mr. Parsons estimates that the company's two Super Bowl ads, produced in-house for what he said was "a little over $1 million," would have cost $2 million to $3 million had GoDaddy sent them out for post-production work involving animation and graphics. But the new facility will give the company the ability to produce more video advertising with greater frequency more cheaply than if GoDaddy had to rely on outside vendors, he said.
The company has reason to watch its nickels and dimes. Mr. Parsons, who estimated GoDaddy produces 8 to 10 ads a year that air as many as 400 to 900 times a week, most often on cable TV, said GoDaddy intends to ramp up its presence in markets including India, Asia, South America and South Africa. That will require producing different ads than Americans usually see, he said; the company's edgy flavor may not work well in other regions. "We're walking in very slowly," he said.
Relying solely on in-house capabilities can prove limiting, and it's not clear that GoDaddy's method would work for advertisers 10 times its size. Indeed, GoDaddy's international ambitions could make an outside partner more appealing. A company that distributes dozens of different video ads around the globe may find it more worthwhile to hire an independent studio or an agency that can make use of an array of offices in different parts of the world.
Keeping things in-house may mean narrowing access to volume discounts on equipment or not being able to call up certain directors or other production talent, said Matt Miller, president-CEO of the Association of Independent Commercial Producers, a trade organization. "The question comes down to, do they really believe they are going to be able to have that amount of both technique and talent at their disposal based on their own employees?" he asked.
For Mr. Parsons, the answer is a simple "yes." Other, more traditional advertisers may rely on well-lit shots of "some young mother petting a puppy," but he's built a business by shooting "a young chick lying down on the hood of a car," he said. It's OK that some people question his methods, according to Mr. Parsons. "We do what we do because it works," he said.
GoDaddy will also use its new studio to create Mr. Parsons's video blog, a promotional tool that has helped the company bolster its Super Bowl advertising in the past, as well as corporate videos.