Fall football kicks off in just a few weeks, and the sponsors of the season’s biggest match-up will look a little different than they did in years past.
First, there will be more beer brands advertising in the 2023 Super Bowl following AB InBev’s recent decision not to renew a decades-long deal for category exclusivity in the game. There will be different food brands: Pizza Hut is no longer the official pizza sponsor of the league, passing that slice of marketing to Little Caesars. On the soft-drink front, Pepsi is dialing back its involvement in the broadcast and will no longer sponsor the Super Bowl’s annual halftime show after a decade.
The sponsorship shifts represent a changing of the guard for the annual broadcast, a tentpole of advertising sales and one of the few remaining places where brands can find big audiences on television. But as ad rates continue to climb and Super Bowl viewership declines, some brands are opting for more flexible ways to appear in the game.
“If you want reach, the NFL is your vehicle for reach—and so whether you’re in alcohol, sales, soft drinks, or cars, whatever, there’s always going to be a need for reach,” explained Martin Conway, an adjunct professor at Georgetown University’s Sports Industry Management program. “But I think there are now questions around, ‘How much should we pay for that reach? And is some of our money better allocated?’”
Flexibility first
The reallocation of Super Bowl sponsorship dollars comes as marketers grapple with several points of uncertainty, including the threat of a recession, continued supply-chain issues, and inflation. CMOs are eager for the ability to shift marketing plans in the event of the unexpected. Among the first to go, often, is upper-funnel brand-building: One in five marketers said they have cut their spending in response to rising inflation, with upper-funnel campaigns, including linear TV, seeing the biggest cuts, according to data from eMarketer.
“Whether it’s a recession or not, they’re definitely anticipating people having less to spend in some of those consumable cyclical-type areas,” Conway told Marketing Brew.
And long-term sponsorship deals are the pinnacle of upper-funnel marketing, requiring brands to lock in ad-spend commitments early and for several years at a time.
“They really deny you a lot of flexibility,” Dave Morgan, CEO and founder of TV advertising platform Simulmedia, told Marketing Brew. “If you’re managing billions of dollars to spend and you really want to maximize flexibility in your portfolio and give more power to your individual brands, you may just say [that] what we did for the last 30 years doesn’t make sense for, and isn’t the best thing for, the next five.”
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Multi-year commitments can sometimes limit the budgets brands have to find audiences elsewhere, especially on digital platforms, Conway said. Pepsi’s move to back away from the halftime show was designed, in part, to help free up media spend for increased digital spending, according to Adweek.
Show off
There’s another less-intuitive reason that some long-term marketing commitments may be on the chopping block: the increasingly short-lived tenure among CMOs, who average less than four years on the job, according to research from Spencer Stuart. Pizza Hut, AB InBev, and PepsiCo have all announced CMO changes in the last year and a half.
New CMOs can often want to show that a brand is taking a different approach to their strategy and can sometimes make sweeping changes to their agencies and marketing strategies, Conway explained. That means long-term deals, like Super Bowl sponsorships, may not fit nicely into that new executive’s plan—meaning they may not be renewed.
“If you’re a new chief marketing officer, and you come in and X percent of your budget is hard-coded to that deal, that’s not really where you want to be, especially if you’re trying to tell a different story or turn the brand around,” Conway said.
Of course, there will always be CMOs eager to get their brand into the Super Bowl in some way or another, which explains the regular influx of first-time advertisers every year. The proof is in the numbers: Even without big sponsorships or commercials, in-game exposure during the Super Bowl in February translated to about $170 million in “equivalent media value,” according to a joint study from sports and entertainment consulting firm Elevate Sports Ventures and AI company Hive.
If some brands step back from the Super Bowl, plenty are eager to take their places. Among some examples, Molson Coors is already moving into the game following AB InBev’s decision to give up the exclusive beer-sponsor spot. And spirits company Diageo, which owns liquor brands like Smirnoff, Captain Morgan, and Crown Royal, became the official spirits sponsor of the league last June. Sports-betting brands have struck up official sponsorships, too.
And brands like Coinbase, FTX, and Crypto.com all joined in on Super Bowl advertising action last season, and some industry-watchers expected more formalized involvement in the league down the line prior to the crypto crash.
“There’s always the new brands that want to establish themselves, and will see the Super Bowl as the most efficient way possible to establish themselves,” Morgan said.