March 2015Working Paper No. 2139
We explore the effects of television advertising in the setting of the NFL’s Super Bowl telecast. The Super Bowl is the largest advertising event of the year and is well suited for measurement. The event has the potential to create significant increases in “brand capital” because ratings average over 40 percent of households and ads are a focal point of the broadcast. Furthermore, variation in exposures is exogenous because a brand cannot choose how many impressions it receives in each market. Viewership is determined based on local preferences for watching the two competing teams. With this significant and exogenous variation in Super Bowl advertising exposures we test whether advertisers’ sales are affected accordingly. We run our analysis using Nielsen ratings and store level sales data in the beer and soda categories. We find that Super Bowl ads can generate significant increases in revenue per household. However, when two major soda brands both advertise, much of this gain is lost. Exploring the mechanism behind the ad effects, we find that Super Bowl ads build an association between the brand and viewership of sports more broadly.
Keywordsconsumer choice, Television advertising