Everything You Need to Know for Super Bowl Investing

The United States is gearing up for this year's Super Bowl, which is scheduled for Sunday, February 11, in Las Vegas, between the San Francisco 49ers and Kansas City Chiefs. The estimated total Super Bowl-related consumer spending is now expected to top a new high this year--- a whopping 17.3 billion U.S. dollars. What company could benefit?

Record 200.5 million American consumers intend to watch the big game, according to the most recent consumer spending data from the NRF and Prosper Insights & Analytics 2024 Super Bowl study. This year, 16.2 million individuals want to watch the game at a bar or restaurant, and 112.2 million want to host or attend a party. The entire amount spent on food, beverages, clothing, decorations, and other goods is anticipated to break the record at $17.3 billion, or $86.04 per person.

"It's an American holiday," says Andy Keenan, executive vice president of Advantage Solutions, a leading provider of sales and marketing services to consumer goods manufacturers and retailers. "The Super Bowl is like a second Thanksgiving, where people gather in huge numbers, and it's all about food, family, friends, and football."

Super Bowl 57 was the most watched U.S. telecast in history, drawing in almost 115 million viewers, according to Nielsen. Again, people should be thinking about the advertising since one-third of American families watch television.

Super Bowl LV generated $434.5 million in revenue from in-game advertising, more than the World Series and NBA finals combined and second only to the Olympic Games, according to a Kantar.com's analysis.

As NBC, the only network airing Super Bowl LVI, is predicted to sell ads at a reportedly record-high price of $6.5 million every 30 second of airtime, up from $5.5 million last year, revenue is likely to surpass last year's total. The stated average 30 second unit cost for this year's game shows a 6% increase.

Brands have an excellent incentive to invest in this. Even before the halftime performance, the advertisements were the third most popular part of watching the big game, according to Kantar's Sports MONITOR fan intelligence service. Consequently, Super Bowl advertisements constantly yield a high return on investment. The 2021 Super Bowl advertisements yielded an average return on investment (ROI) of $4.60 for every dollar spent, according to Kantar analysis. The most successful ads were those for Mountain Dew, Verizon, T-Mobile, and General Motors. Effective creative is crucial to helping brands take full advantage of this enormous opportunity.

However, this level of brand reputation costs a good fortune.

"Fresh IPOs — especially those a year or two out — tend to overspend, on Super Bowl ads, stadium naming rights, whatever. They have lots of cash, so they hire a lot, spend a lot and sometimes it just doesn't work out. … A little change to the economy or market and they're a fallen angel fast," Josef Schuster, CEO at IPOX Schuster Says.

"They're pretending they're in the big leagues by spending like a big leaguer," David Trainer, president of New Constructs says.

"These are 'Hail Mary' ads hoping to generate the revenue these companies need to make their businesses solvent," says David Trainer, president of New Constructs, which includes Ad/IPO losers Carvana, DoorDash and Uber on its list of "zombie stocks" — companies within sniffing distance of bankruptcy due to heavy cash burn against limited cash reserves. "They're pretending they're in the big leagues by spending like a big leaguer; that's not good for a young, immature company.

According to TickPick, this year is already the most expensive Super Bowl ticket to date.

The get-in price on the website, which is the cheapest ticket up for sale, is currently $8,000. The cheapest ticket at this time last year would have run you just under $6,000. But, again, that's just the price to get in the building. The average ticket price currently sits at around $9,800 - about 70 percent more expensive than what a ticket cost in 2023.

Ticketmaster, Seat Geek, and other ticketing platforms are expecting to see a large traffic from the event. Seat Geek is a part of the NFL's Officially Licensed Ticketing Platforms, while Ticketmaster is reported as the Official Ticket Marketplace of the NFL.

Online sports betting is legal in more than half of U.S. states, and North Carolina will begin to allow it in March just as the NCAA men's and women's basketball tournaments get underway.

A record 50.4 million American adults bet $16 billion on last year's Super Bowl, according to data from the American Gaming Association (AGA). The number shows a 61% increase from 2022 estimates, and the wagering total more than doubled the prior year's projections. Shaun Kelley of Bank of America forecasted that gross gaming revenue will rise by about 18% by 2024.

Stantial claims that DraftKings and FanDuel account for over 80% of the U.S. market for online sports betting, which he credits to their "leading product quality, initial brand awareness investment, and advantages to scale relating to customer acquisition."

In addition to FanDuel, established casino operators like MGM Resorts, Caesar's Entertainment, and Wynn Resorts have been posing a serious threat to DraftKings. And now, Disney's ESPN is also entering the sports betting market.

Source: Bloomberg, Brand Innovator, Forbes