The Super Bowl is arguably America's largest sporting event, drawing in over 114 million viewers and bringing millions of dollars of economic activity into the region. The sporting event is the National Football League's championship game, ending six months of games across the country and weeks of playoffs. This year, Super Bowl 50 takes place between the Carolina Panthers and Denver Broncos in Santa Clara, California-right outside of San Francisco-and will be broadcast on CBS (NYSE: CBS). But beyond the matchup are prime opportunities for businesses to reach millions of consumers and grow their brand. One of the cornerstones of every Super Bowl are the noteworthy commercials, with companies paying over $5 million for a 30-second spot in this year's game. For CBS, broadcasting the event brings in hundreds of millions of dollars in advertising revenue alone. The 2015 Super Bowl broadcast 71 national ads, with a similar amount expected to run this year. Additionally, CBS is expected to advertise its own content during the game, hopefully drawing audiences to its upcoming winter season.
Beyond simply the impact on CBS, companies who produce buzzworthy ad spots can expect significant increases in social media impressions and revenue. The Super Bowl is a major draw for major companies largely due to the event's diverse audience-with viewers of almost every class, background, and age. This fact causes companies who spend little on mainstream advertising campaigns fork out the millions of dollars required for Super Bowl advertising.
This year brings highly-anticipated ads from both Amazon (NASDAQ: AMZN), who is touting its new Echo voice-command product, and money-sharing service PayPal (NASDAQ: PYPL). Both companies advertise largely through social media channels, but the opportunity to impress over 100 million consumers at once is hard to pass.
Most companies shroud their ads in secrecy until their Super Bowl debut, but others attempt to promote their ads weeks before the game. Software company Intuit (NASDAQ: INTU) spent $10 million on two 30-second ads-one for itself and one for the winner of its "Small Business, Big Game" contest. Intuit encouraged consumers to vote on a small business that would win a featured ad on the nation's most-watched television program. This move is risky for Intuit, but can bring success in maintaining its small business-friendly image, as the company sells a large portion of its software to small, local companies. Death Wish Coffee, a small coffee company based in New York, won the 30-second spot and is expecting a large boost in business after the Super Bowl. With $6 million in revenue last year, the company can easily surpass that number in the weeks after the sporting event alone if just a small portion of the 114 million viewers become buyers.
But simply putting a spot in the Super Bowl is not a guaranteed success for companies. In the past, brands have come under fire for underwhelming or offensive commercials. GoDaddy (NYSE: GDDY) put out a commercial featuring puppies, which animal rights activists deemed offensive because they viewed it as encouraging puppy mills. Another company, Just for Feet, put out an ad in the 1999 Super Bowl that was called out as racist and colonialist, leading to a major lawsuit with its advertising and, many say, began its path towards bankruptcy several years later.
But the advertiser with the most to gain from the Super Bowl is the halftime show's official sponsor, Pepsi (NYSE: PEP). The beverage and snack company is placing ads for several of its brands, including Mountain Dew and Doritos, throughout the game as well as featuring Gatorade prominently on the sidelines with each team. Additionally, Pepsi's halftime show sponsorship is noteworthy in large part because the halftime show-this year featuring Coldplay and Beyonce-is the most-watched segment of the telecast, with over 120 million viewers tuning in for the mini-concert.
Beyond major companies, the Super Bowl majorly impacts its host's local economy with thousands of spectators heading towards Santa Clara for the big game, bringing with them millions of dollars in tax revenue and tourism spending. While hosting the game is estimated to cost the region more than $5 million, the city hopes to earn it back with tax revenue. More significantly, though, is the windfall many local businesses and restaurants are expecting in the next few weeks. Last year's game is said to have made over $719 million for the Phoenix, Arizona region, which excites Northern California residents, many of whom are listing their houses for up to $7,000 per night on sites like AirBnB.
The Super Bowl generates hundreds of millions of dollars in economic activity each year, involving everyone from the country's most successful businesses buying commercials to local hotel chains profiting from increased demand. While the Super Bowl crowns one team as national champions each year, the real winners are the local and national businesses involved in America's most-watched spectacles.