And therefore, it was a bit surprising that one of the most watched shows in the world and sports has not renewed its naming rights with the company that held them. The Super Bowl Half-Time Show will no longer be accompanied by the word “Pepsi.”
Before analyzing the implications of this decision, we must remember the importance of acquiring a naming. The first thing is that it is an element that has brand recall connotations. A good naming right helps to move indicators such as awareness, top/share of mind, reputation and many that help all those that we include as Branding. Brand generation. Some divide these naming rights into Title, Name and Presenting (Title, Name, Presenting), which can expand the catalog of options for the same event.
So, the so-called naming rights refer to the association of a brand with an asset that will be known or named by the same brand that has decided to be associated. That is why we have the Liga BBVA MX, the Minute Maid Park, the PetCo Park, the Mercedes-Benz Arena or the Toyota Center to name a few examples.
Let’s go back to the case of the Super Bowl. Pepsi’s contract with the NFL expired after this 2022 season. The company renewed its sponsorship deal with the league, but under the terms of the new agreement, it will no longer be the presenting partner of the iconic halftime show. Why? Isn’t it profitable? What did Pepsi see to make a decision of that size?
The answer is: digital media. Around this decision is the movement that Pepsi wants to make to move towards connecting with digital audiences and moving its spending in that direction. In other words, the traditional transmission continues in a gradual and progressive reduction, so it is clear that the perceived value of the asset is no longer the same.
However, the numbers are not negligible: this 2022 there were 103.4 million viewers who saw the performance of Dr. Dre, Snoop Dog, Eminem and company. This was not the highest rating, we would have to go back to 2015 when Katy Perry broke all records with 120.7 million viewers. While 2021 was disappointing, The Weeknd “alone” drew 96.7 million.
It is estimated that with the departure of Pepsi, the rights could be worth between 40 and 50 million dollars annually. And before that, Bridgestone paid around $10 million a year. Price at which Pepsi more or less acquired the rights in that already distant 2012. That is, it is estimated that the value was between 100 and 120 million dollars. In other words, the value will continue to be high due to derivatives.
Reports indicate that Pepsi overpriced the 2012 estimated price of halftime (about $10 million). In 2021, Pepsi earned about $9.4 million in earned media, or return of media value, and that’s just from streaming. On digital, it received the most comments on Twitter three years in a row compared to other advertisers in the same Super Bowl. Let’s think for a moment, many brands launch campaigns and spend large sums of money to produce spots that are memorable. Those 30 seconds sold for 6.5 million in 2022. Basic math indicates that then the media value becomes exponential. However, the counterpart is the operating cost of the event, plus the hiring of artists, production, etc. Surely the accounts were not so good at the end with the decline in audiences and an increase in digital revenue.
Imagine for a moment hiring Beyonce, Bruno Mars, Katy Perry, Coldplay, Lady Gaga, Justin Timberlake, Maroon5, J-Lo and Shakira, The Weeknd and the cream of rap and R&B. It is a monumental effort and a high cost.
Pepsi has now decided to move more into other digital order properties and some more tactical ones like the NFL Draft and player awards in various categories.
This opens up possibilities for another brand with branding needs to jump onto the half-time show stage, but it also tells us a lot about where the world and the entertainment industry itself are moving. And it also tells us about the much-mentioned decline in TV audiences, which although the downward curve in Latin America is not so pronounced, it will surely gradually increase in the coming years.
Pepsi has left its legacy with memorable half times and joins other brands that have sponsored an event that arouses emotions (and now conversations and digital trends) such as the Carnival Cruises that were the first in 1979, for which 10 years later Coca-Cola will arrive. Cola and from there, brands such as Oscar Mayer, Royal Caribbean, Progressive, eTrade, AT&T, AOL, Ameriquest and Sprint were presenters of the show.
The soft drink makes its mark as the brand with the most presentations: 10. Bridgestone follows with five where they presented Tom Petty, Bruce Springsteen, The Who, Black Eyed Peas and Madonna.
Pepsi’s new contract with the NFL is also estimated to last 10 years and be worth about $2 billion. Now, Pepsi will be able to use its rights to the Frito Lays, Tostitos and, of course, Gatorade brands, which will continue to hydrate NFL players. Part of the strategy is to launch a new range of products that include some pre-competition and others for recovery that we will not see on the market until 2023.