Super Bowl ads and the economy—what layoffs and downturn mean for the Big Game

Even as big tech companies and major brands lay off employees amid continued economic uncertainty, marketers still plan to shell out as much as $7 million for glitzy Super Bowl ads. While economic woes aren’t expected to be directly addressed in most Super Bowl campaigns, the shaky financial situation is still looming behind Big Game campaigns. Perhaps, most visibly, are Workday’s and Google’s decisions to air commercials on Super Bowl Sunday—for Workday, it will be its first Big Game appearance—despite both recently announcing plans to lay off employees. It is unclear how Google will approach the Big Game amid its 12,000 job cuts and if any plans were changed as a result. A spokesperson for the tech giant declined to comment. A Workday spokesperson said its Super Bowl ad remains unchanged after laying off 525 employees. Related: Tracking layoffs and other economic moves “As we navigate this uncertain environment, it’s important we help ensure Workday is set up for continued growth for many years to come,” the Workday spokesperson said. “This includes continuing to invest in the strategic areas of our business so we can capitalize on the opportunity in front of us; aligning our resources against business priorities; optimizing in certain areas so we can operate more efficiently; and prioritizing to meet customer and market demands. We see our brand as a strategic area of investment for us and our decision to do a Super Bowl ad is part of our long-term, multi-year plan that we’ve been considering for over five years.” Workday's decision to air a commercial in the Big Game despite the economic uncertainty was strategic, Pete Schlampp, chief marketing officer, said during an Ad Age Remotely interview in late January. “We know that during those times companies that are investing in their people and in their workforce, they end up coming out ahead, and that’s certainly what we are see in our business,” he said. “We also know that companies that invest in their brand and advertising during challenging times like this actually have a higher ROI on the other side,” Schlampp added. “So it was a very conscious decision we made to do this ad and we expect to have a great outcome on the other side.” Check out the latest Ad Age events and award programs Advertising in a downturn It’s widely known that brands that continue to advertise through a recession often gain market share. According to a recent Analytic Partners report, cited in an Ecommerce Times story titled “Increase Spend or Lose Sales,” 60% of brands that increased media spend during the last recession saw greater ROI, and those that spent more on paid advertising saw a 17% increase in incremental sales. Many advertisers, naturally, advocate for brands to keep investing big bucks into marketing, especially on tentpole events such as the Super Bowl. “It’s clearly a tough economic time, especially in tech, but buying ad space, particularly units which the most eyeballs in the world are on, is not the same thing as buying a corporate yacht,” an agency executive who spoke on condition of anonymity said. “It’s a play for market share, and that helps businesses grow and thrive for their people, and that is what we all want for the economy.” Still, to employees of a company that just underwent mass layoffs, a $7 million Super Bowl ad buy may leave a bad taste. “It’s in poor taste, but it’s also business,” one public relations executive who spoke on condition of anonymity said, referring to any company that’s undergone layoffs planning to have a Big Game ad. The executive said a company like Google should be communicating in some way internally to staff about the marketing strategy behind the ad buy. “It doesn’t help with morale, for sure,” the PR exec said. “Companies are under the microscope after they have layoffs. Everything can be taken personally. But business has to go on and the Super Bowl is a huge event.” An ad agency and former Microsoft executive, who also spoke on condition of anonymity, said a company like Google will come off better to viewers watching the Super Bowl by focusing on promoting specific products versus doing a big branding spot. “If you look at the press, I do not see any positive mentions of Google, all I see is the dogpile that is the layoffs,” the ad agency exec said. “They’re going to have a hard time breaking through with anything positive right now. For paid media, push core products and drive things that are more promotional or drive adoption of core products. Push the phone instead of the platform. People will be more receptive of a product promotion than to the brand.” Of course, that runs counter to the usual Super Bowl strategy, which is predominantly a big brand play that is less about driving sales than generating brand awareness. Amazon, another consistent Super Bowl advertiser, having run spots in the last seven games, has not yet revealed its Big Game plans after announcing last month that it would lay off 18,000 employees. An Amazon spokesperson did not return requests to comment on its game-day strategy. Other brands such as Meta, which laid off more than 11,000 employees in early November, opted not to have an ad in this year’s game. Meta ran a metaverse-themed spot in 2022. And many automakers are also choosing to sit out of the game due to the slowing economy. So far, Kia is the only auto brand to confirm it will air a commercial in the Feb. 12 game on Fox. While more automakers are expected to buy in, the overall category presence appears to be down from last year, when six automakers aired a total of eight ads. Toyota, which ran two spots in 2022, won’t air an ad this year. Travel, like auto, is another area that will not have a huge showing at the Super Bowl as the industry is starting to see consumers taking fewer trips amid rising inflation. Several travel companies including Turkish Airlines, Expedia and Booking.com aired Big Game commercials last year but so far only Booking.com has confirmed a national ad buy this year. Read more: Behind travel brands' Super Bowl plans Even companies that have been relatively unimpacted by inflation are concerned by the fact that many tech companies, which are supposed to be selling some of the products most-coveted by consumers, are undergoing layoffs, and it’s causing them to be more cautious with their media spend, a second agency executive said. Mekanism, which has been behind several Super Bowl spots in past years including PepsiCo’s intro commercial to the Bruno Mars halftime show in 2014, is creating what it is calling “adjacent” campaigns to the event this year, as all of the creative agency’s clients chose to forgo splurging on an increasingly expensive national Big Game ad. “Media is definitely way down and it’s expected to come down further in 2023,” Jason Harris, Mekanism's CEO and co-founder, said. Harris said if anything, though, the slowing economy makes big advertising moments like the Super Bowl even more important. “Maybe it’s an even more important part of the media mix,” Harris said. “It’s almost more important to get the ad right; get that buzz.” But he said marketers can be just as successful with smaller buys. Regional ad buys cost between $200,000 and $1 million, versus the $7 million for one national spot. Going local Client Alaska Airlines, for example, will air a regional Super Bowl ad again this year; running one spot promoting its Visa mileage plan in the San Francisco and Seattle, Washington areas. The Washington-based airline had a similar strategy last year. Eric Edge, managing director of marketing and advertising, Alaska Airlines, said the regional ad strategy works for the company because it can then target specific audiences—in its case, travelers on the West Coast, where it has nonstop flights—with an accompanying social and digital buy. “People watching the Super Bowl in a specific market see the spots and often don’t differentiate between national or regional,” Edge said. Harris said he’s been behind Super Bowl ads that have taken off in popularity and ones that have flopped. As a marketer, you have to weigh the risks and rewards of a national versus local buy, he said. For companies trying to target key markets, doing a local buy for the Big Game is a less risky and less expensive move. “The Super Bowl is such a big moment—millions of people tune in—many to watch the game but also to enjoy the TV commercials,” Edge said. “As the only national airline based on the West Coast, we’re excited to show up on screens in our hometown and the Bay Area with Tan France and our Care Coalition to continue the momentum we started last year and show guests how we are the most caring airline.” Creative impact Economic factors are expected to have less of an impact on the creative. But viewers may notice some mentions of the shaky economy. Rakuten is incorporating a financial message into its Super Bowl spot, its second appearance after a 2022 Big Game debut. The company, which gives cash back to customers who shop at its network of stores, tapped the ultimate shopper—Alicia Silverstone’s “Clueless” character Cher Horowitz—to let consumers know Rakuten can help them save during times of economic strife. “The anxiety of how people are feeling about the economy—not only will we have a business solution for them, but we’ll have entertaining communication that will make people feel good about where we are right now,” said Vicki McRae, senior VP of brand and creative, whose internal team created the 30-second spot. A 15-second teaser was released today. In general, Super Bowl ads are expected to have a more light-hearted and comedic approach, according to an ad agency executive behind one of this year’s Big Game commercials. The exec said the ad strategies will be even more about building brand affinity and less about driving sales to a specific product because of the current inflationary pressure on consumers. Brands including Diageo brand Crown Royal, Avocados from Mexico and Uber are all leaning into humor and celebrities for their Super Bowl showings. “Product plus humor plus star,” Mekanism’s Harris said, “that seems to be the formula that everyone follows.” Super Bowl marketing All the latest Big Game ad news in one spot Click here for updates Iris Managing Director Oli Bealby said brands that will win the Super Bowl this year will be ones that add value while having fun and aren’t just trying to get people to make quick decisions, as he felt the Big Game ads from crypto companies including FTX and Coinbase did last year. “People were falling hand-over-fist to get customers at any cost,” Bealby said. “Marketing during the Super Bowl [in 2022] was all about pushing speculative products, through the lens of ‘FOMO,’ to get people to react quickly. But the world is different today. People are far more conscious of their money and how they spend it.” “I think CMOs need to ask themselves why they want to do a Super Bowl spot,” he added. “If there is a genuine business objective that they truly believe can be accomplished, and it isn't simply for the sake of ego, they should go for it but be intentional about it also.” The second ad agency exec also said most Super Bowl ads will be part of a larger campaign strategy versus being a one-off spot; which helps justify the $7 million cost internally. “It has to be a part of a larger program,” the exec said, pointing to M&M's as the most obvious example of this strategy this year. M&M's recently announced it will sideline its iconic spokescandies—a response, it said, to its controversial makeover of the characters last year—but many experts believe the move is actually just a stunt to drive more momentum for the brand ahead of its Big Game ad. Read more: Experts weigh in on M&M's spokescandies controversy A longer play can also help the overall success of a Super Bowl campaign, which will be key as brands emphasize the need to see performance from all their media buys amid the slowing economy. “You may be asking whether a recession, or rather, what we’re in which is a period of rising inflation that’s causing acute anxiety and slowed consumer spending, impacts the creativity or the willingness to experiment on the part of big brands, and I don't think it does,” Orci CEO Marina Filippelli said. “But one thing is for sure, clients are feeling this anxiety and that will no doubt put greater pressure on them and their creative teams [and] agencies to deliver campaigns that show proof of performance.Contributing: Adrianne Pasquarelli

Super Bowl ads and the economy—what layoffs and downturn mean for the Big Game

Featured Stories