If Super Bowl XLIII was dubbed the Recession Bowl, then Super Bowl XLIV can rightfully claim to be the Recovery Bowl, as some consumer stats rose and advertisers placed big multi-million dollar bets. The world's most popular advertising commercial showcase was dominated by the incompatible combination of beer and autos, but predictions say that Facebook and Twitter are the odds-on favorites to benefit most from long-term Super Bowl advertising spillover.
In 2009 the extravagance of the Super Bowl recessed to mirror the mood of the country. In 2010, despite the fact that a substantial number of Americans still disapprove of the $93,000 per second paid for advertising, Super Bowl XLIV recovered at least some of its buzz.
The public expressed a lot of emotional investment in the Super Bowl XLIV before the pre-game show even began. (The Recovery Bowl moniker will definitely stick for a long time with a New Orleans upset.) But even though a good number of the 100 million viewers actually cared about the final numbers on the game scoreboard this year, the majority of viewers still cared more about what happened in between the action on the field. According to a Nielsen poll, 51% of Super Bowl television viewers expected the commercials to provide the best entertainment of the event.
Advertisers are always optimistic about the return on their Super Bowl advertising investment, but this year that optimism seemed to be far ahead of consumer reality. Spending for merchandise, food, and televisions was even lower in 2010 than it was for last year's Recession Bowl, according to the annual Retail Advertising and Marketing Association (RAMA) "Super Bowl Consumer Intentions and Actions Survey." Overall, about $8.9 billion Super Bowl dollars were predicted to change hands in 2010, which drops Super Bowl spending back to 2007 levels. Unfortunately this stat indicates recession, not recovery.
The marketing scoreboard for every Super Bowl is cluttered with numbers that measure the non-sports aspects of the event from every conceivable angle, even some angles that probably never really needed to be conceived. Some of the numbers on the 2010 marketing scoreboard provide the answers to the Recovery Bowl FAQs for the retail industry.
Who Purchased Advertising Spots in Super Bowl XLIV From the Retail Industry?
- Twelve retail industry companies advertised in this year's Recovery Bowl, compared to 6 retail advertisers in last year's Recession Bowl.
- More than half of the retail industry advertisers in the 2010 Super Bowl were automobile companies or auto-related. Only 3 car companies were Super Bowl advertisers in 2009.
- Looking at the history of Super Bowl retail commercials, automobile companies lead the retail advertising spending, having spent $108.6 million on Super Bowl commercials. This puts automobile retailers Super Bowl budgets third, just behind Hollywood movies and beer.
What Retail Industry Products and Services Were Advertised In the 2010 Recovery Bowl?
Take the Super Bowl Super Commercial Super Trivia Quiz
Why Were Retailers Willing to Pay $93,000 Per Second to Advertise in the 2010 Super Bowl?
- A study by one ad agency revealed that 66% of 2009 Super Bowl viewers remember their favorite advertiser, but only 39% remember which team won. The same survey concluded that 40 million people will watch the Super Bowl commercials online, and 26% will share their favorite commercials with their friends in cyberspace.
- According to a ComScore poll, 77 million people will be logged onto the internet before the Super Bowl begins this year, and 3.8 million of them will be buying Super Bowl related merchandise.
- If post-game results are the same in 2010 as they were in 2009, web traffic to the websites of Super Bowl advertisers will increase an average of 63%, the day after the event, according to Nielsen.
- Month-over-month web traffic increased an average of 6% on the websites of 2009 Super Bowl advertisers from January to February.
When Retailers Advertised in the 2009 Recession Bowl, What Results Did They Get?
- Denny's bought one ad spot in Super Bowl XLIII, and served two million free Grand Slam meals that were offered during that commercial, at a cost of $5 million in free food. Same store sales in the Denny's chain fell 4.5% in the first three quarters of 2009. But because of the free press and image boost that Denny's received from its Recession Bowl promotion, the company more than doubled its Recovery Bowl spending. Three Denny's spots were purchased in 2010.
- After just one 30-second spot, Overstock.com had 728,000 visitor on its website the day after the Super Bowl in 2009. This represented a 33% increase in traffic for the deep discount internet retailer.
Does It Matter How Retail Companies Advertise in the Super Bowl?
The commercials that run in the first quarter will be remembered much more than those that appeared later in the game, according to Nielsen.
When Is It Not a Good Time for Retailers to Advertise During a Superbowl?
According to the ComScore survey, 37% of people disapproved of the advertising dollars spent on the 2010 Super Bowl, 21% approved, and 41% didn't much care one way or the other.
Which Advertisers Will Win The Competition for the Consumer in Super Bowl XLIV?
The odds-on favorites to win in the long-term are Facebook and Twitter. Neither of these companies purchased advertising spots because why would they? Driving traffic to and through Facebook and Twitter accounts is a big part of the overall marketing strategy for just about every Recovery Bowl advertiser.
The only thing Facebook and Twitter needed to do to capitalize on the largest U.S. sporting event of the year was to figure out how to remain functional during heavy traffic spikes. Tweeters of the world know that remaining functional for several hours in a row is a challenge for Twitter on regular days. So hopefully the head Twits prepared well for #SB44, which was predicted by many to be a social media phenomenon.
U.S. retail industry companies stand to profit in 2010 from Super Bowl XLIV whether they purchased advertising time for the event or not. An exciting game, a spectacular half-time show, some buzz-worthy commercial entertainment, and a sentimental favorite underdog team had all the makings for a mood-altering event. If the 200 million eyeballs that were focused on the event get a sustainable buzz from it, then the Recovery Bowl might be viewed historically as a significant contributor to the attitudinal recovery of the American consumer.
As they say, in economic recovery, as in sports, (as in life), attitude isn't everything, but it is pretty much all that.
More About the Retail Industry in the Super Bowl:
Fifteen members of the U.S. retail industry were designated to be 2010 "Best Companies to Work For" on Fortune Magazine's most recently released ranking list. A look at a five-year comparison of Fortune's best retail employers reveals that these same fifteen companies are denizens of this particular ranking list. EBay (EBAY) fell off the list completely this year, and Starbucks (SBUX) dropped to #93, compared to its previous ranking of #24. Considering the news that's been coming out of both of those companies, neither of these changes is particularly surprising.
While there were no big surprises for the retail industry in this year's best employers list, when compared to another recently released workplace study, the Fortune "Best Companies to Work For" list gains much greater significance for U.S. retailers in 2010.
While Fortune was compiling its best employers list, the Conference Board, a non-profit management organization, was doing a study of its own. The Conference Board study revealed that job dissatisfaction in the U.S. is at its highest level in 23 years. According to the 2009 Conference Board job satisfaction study, here's how average American workers feel about their jobs:
- Only 12% are "very satisfied" with their jobs
- Only 34% are satisfied with their paychecks
- Only 28% are satisfied with the non-financial recognition they receive at work
- 22% are hoping to get a new job in the next year
The 13 million people who have no jobs at all probably read those statistics and find it hard to muster much sympathy for the people who still have regular paychecks, no matter how unsatisfying the workplaces behind those paychecks may be. The unemployed would probably also be willing to switch places with the 22% who are eager to leave their unsatisfying jobs so that they can take their turn on the unemployment line. That seems fair.
The most significant thing about this job dissatisfaction survey is... read more>
There may not have been a lot of sales in the U.S. retail industry in the first two weeks of 2010, but there were plenty of numbers. Unlike this time last year, 2010 store closings are in the hundreds, instead of the thousands, job cuts are in the thousands instead of the tens of thousands, store opening plans far outnumber store closing activities, and global stores openings are planned in every developed country.
But even though we're all desperately seeking recovery, Chapter 11 filings and unemployment continue, while numbing numbers and hasty headlines are giving false positive signals that create inflated hope and lead to disappointment. Disappointment is not really good for the consumer psyche right now.
Watching retail numbers spin out of the U.S. retail industry in the past couple of weeks was like watching an episode of "The Bachelor" reality show. It's equally as humorous to watch seemingly intelligent women conclude that they have met their happily-ever-after soulmate at the end of one date as it is to watch seemingly intelligent retail experts conclude that the retail industry is in recovery after any less-than-horrible number is reported.
Christmas week sales were up 2.3%. "Recovery!" Holiday sales estimates predicted a positive 3.6%. "Recovery!" Same store sales were up 2.9%. "Recovery!" Online sales jumped 5%. "Recovery!"
But just like it always happens with The Bachelor's harem too, reality crept into the retail industry, and premature conclusions proved themselves to be sadly uninformed. Month-over-month, December sales were actually down, unemployment is stuck at record high levels, and adjusted for inflation, the full year of 2009 sales is at 1999 levels. That doesn't add up to happily-ever-after to me.
Two days before these reality numbers hit the retail industry last week, economist Mark Zandi stood in front of the 99th annual National Retail Federation (NRF) Conference and reportedly told a room full of retail industry professionals, "The economy today is measurably better than a year ago." Really, Mr. Zandi? Better?
In December 2008 the unemployment rate was 7.2%. In December 2009 that rate was 10%. According to my calculator, Mr. Zandi, that's 3.9 million more people who don't have a regular income this year than a year ago, which is not exactly "better" by any measure.
In 2009, businesses filed bankruptcy papers 89,402 times, which was nearly a 40% increase from 2008. Explain to us, Mr. Zandi, if the economy is better than it was a year ago, why did the number of personal bankruptcy filings increase by 32% in 2009 and why does the American Bankruptcy Institute expect that to increase even more in 2010? If the ABI is correct, more than 1.4 million additional Americans will be bankrupt and living with a trashed credit rating by the end of 2010. That doesn't seem to be better, Mr. Zandi, but I'm sure you have some kind of an extrapolation that tells you why it is.
If things are measurably better now, then why are 871,086 more people without their homes, their equity, and their housing investment at the end of 2009? This is on top of the 861,664 people who had their homes repossessed in 2008. If renting is better, homelessness is better, and moving down on the socioeconomic ladder is better, then I guess you're right that life for these people is measurably better, Mr. Zandi.
There is one thing that is notably better than last year, and that is the stock market. That could be considered a positive point to support Mr. Zandi's position except for one thing. The stock market, as has been dramatically illustrated more than once in the past two decades, is not really a reliable economic indicator as much as it is a legal form of institutionalized gambling.
I'm sure Mr. Zandi would want to remind me at this point that unemployment and retail sales are lagging economic indicators and then pull out lots of graphs and numbers that prove that his economic conclusions are correct. To that I would have to remind Mr. Zandi that he delivered his "measurably better" message to a retailing audience, and that retailing can never be reduced to numbers and charts because there are people involved. People are not numbers, human beings can't be quantified, and the "laggards" aren't really in a big spending-consuming mood. It's the people whose lives are "measurably worse" that are causing the reality of recovery to be out of line with economic calculations, estimations, and predictions.
So what are retailers supposed to do with all of this conflicting data and all of these mixed messages? Hopefully, they're ignoring the numbers and paying attention to their customers. To average consumers, "the economy" doesn't extend beyond their own personal financial statements. And despite what any economist says in any keynote speech, if average American consumers were asked to describe their personal finances, I find it hard to believe that a great number of them would actually check the box that says "measurably better."
Leaders of publicly traded retail organizations know better than to get all twirled up in industry numbers and those who analyze them. But retail onlookers might think that all of the numbers and conclusions that have been flying around in the past few weeks seem conflicted, crazy and chaotic. For these people, a book like "The Retail Industry Numbers for Dummies" would be helpful.
It might seem like this would be one dull book, but really a "Retail Industry Numbers for Dummies" manual would be a very quick read because it would only need to contain about five points and five paragraphs:
#1 - The NRF and ICSC are industry trade organizations and will always spin numbers and facts in a way that will shine the most positive light on their retail industry members. Assume the numbers from these organizations are always skewed to the positive.
#2 - Same store sales are the most largely ineffective measurements in existence and shouldn't be considered a meaningful indicator of much of anything. Follow the lead of stock analysts and investors and largely ignore monthly same store sales numbers.
#3 - Analysts are "disappointed" much more often than not. Consider analysts' predictions to always be overly optimistic.
#4 - Most of the media is more interested in good headlines than good understanding. Consider their conclusions to be inappropriately broad, and hastily drawn.
#5 - Economists live in a world of numbers and theory, but human beings do not. Since the warm-blooded part of retailing can't be quantified, economists' conclusions are almost always incomplete when it comes to retailing.
With these five guidelines in mind, the numbers that came out of the U.S. retail industry in the past few weeks make a lot more sense.
Out of 80 economists asked to project December's retail sales numbers, 80 of them were wrong, according to Reuters. I would say that even that number is wrong because by my calculations, the total should be 81, after hearing what Mark Zandi had to say at the NRF convention.
We're glad that the recession is over on paper, Mr. Zandi (and Mr. Bernanke), but paper isn't people, and telling people in diminished circumstances over and over again how much better the economy is, isn't very endearing. And making business decisions based on paper reality rather than people reality is not very wise for the U.S. retail industry. The U.S. economy can't afford for the U.S. retail industry to make major missteps because it is the one industry saddled with the contradiction of being both a leader and a lagger in recovery.
Until the lives of consumers are actually "measurably better," retailers can't believe in that reality because if they do, they will lose touch with the needs and expectations of their customers, and then they will lose those customers. That is the non-extrapolated reality of this year's retail reality show.
The easiest way to summarize the value of an entire year is to cherry-pick the most dramatic happenings and highlight them on one neat and tidy best and worst list. It's a traditional New Year exercise and the compulsion to do it this year seems to be particularly strong. That's probably partly because we're moving into a new decade, and mostly because we're especially anxious to leave the old decade behind.
As it pertains to the U.S. retail industry, it's pretty easy to rattle off the many worsts of 2009 - the worst store closings, worst stock prices, worst job cuts, worst sales comps, worst bankruptcies, and worst recessionary missteps. It's not quite as easy to rattle off a list of the bests for U.S. retailers in 2009. Unless less-worse is considered to be the new best, then the "bests" gets a little bit easier to identify.
The specific details behind the picks for the Best and Worst of the U.S. Retail Industry in 2009 list can be found by clicking on each individual link. In general the criteria used to pick the "Best and Worst of the Retail Industry in 2009" was an equitable blend of industry recognition, hard numbers, expert analysis, and because-I-said-so opinion. Holistic measurements are always best.
Since it's been a year of mostly bad news for the U.S. retail industry, let's end the year by focusing first on the best.
The Best of the U.S. Retail Industry in 2009... read more...
