The Baltimore Ravens and San Francisco 49ers face off in this Sunday's Super Bowl. But they won't be the only ones engaged in heated battle.
The Super Bowl has become the holy grail of television events, with a record 111 million viewers tuning in last year. That's why companies pay seemingly ludicrous fees -- $8 million for a 60-second spot -- to buy up the rare ad space that draws more than 100 million sets of eyeballs. The commercials, after all, are a big reason why many people watch the Super Bowl.
The trick is producing a clever commercial that people like.
A catchy or witty commercial that strikes the right cord with viewers will stick with them in the weeks to come -- and help them remember the product that was pitched. If you liked the E*Trade baby commercials, for example, you're more likely to use E*Trade the next time you open an investment account. Or so they say. On the other hand, companies whose commercials flop are wasting an $8 million opportunity to capture America's attention.
Some companies never flop come Super Bowl time. Their commercials always resonate with viewers, and they use the vast Super Bowl stage to attract millions of new customers.
It's not a public company, but GoDaddy -- which allows individuals and businesses to register and start their own websites -- is a perfect example of a company that used the Super Bowl as a springboard to future success. Featuring attractive women and using sex appeal to lure people to its site, GoDaddy ads started airing during the Super Bowl about a decade ago. At the time, no one knew what the heck GoDaddy was. Now it's a household name -- and the Super Bowl is a major reason why.
As investors, though, publicly traded companies are all we care about. Below are several of them that should get a nice boost from this year's Super Bowl. Some are Super Bowl mainstays whose stocks always tend to rise in the weeks following the big game. A couple of them are companies whose stocks should benefit from this particular Super Bowl.
Like cases of light beer and giant bags of corn chips, these are stocks that might be worth loading up on in time for the big game:
- Anheuser-Busch InBev (BUD): Read that last sentence one more time. Few people watch the Super Bowl without an ice cold beer in hand. And as the slogan goes, Budweiser is the "King of Beers." That's surely debatable -- but not when it comes to the Super Bowl. Budweiser is as much a part of the Super Bowl as hard hitting and halftime show lip synching. Who can forget the "Bud Bowl," a former Super Bowl staple? It has since gone the way of the dodo bird and the Bud Light Lime, but that doesn't mean Anheuser-Busch is no longer producing solid commercials. The Clydesdale ads, for instance, are still a Super Bowl favorite. Because Anheuser-Busch is such a major presence on the biggest television day of the year, its shares almost always rise in the weeks that follow. BUD shares have surged an average of 6% each the last three Februarys. Expect a similar rise this year.
- PepsiCo (PEP): Pepsi and Coke (KO) always have a huge Super Bowl presence. This year, however, Pepsi may have the edge -- and it has to do with Beyonce. Pepsi is sponsoring the halftime show, which this year will feature the lovely Ms. Knowles. In fact, it's actually called the Pepsi Halftime Show. That could give Pepsi a leg up in its annual battle for soft-drink supremacy, and could attract a few more investors than usual.
- Automakers: No fewer than seven automakers will run ads during this year's Super Bowl. That kind of free spending is a sure sign -- if not a collective battle cry -- that the auto industry is back. Publicly traded U.S. auto stocks are already on a major run as car sales have returned. General Motors (GM), Honda (HMC), and Toyota (TM) shares have risen an average of 22% in the last year. With healthy bottom lines again, those companies are sparing no expense in their efforts to attract customers. They're sure to attract plenty more after this Sunday.
- Research In Motion (RIMM): Remember this company? Maybe not. Let me refresh your memory: It's the makers of the BlackBerry, a cell phone that's so outdated it might as well be a rotary phone. But here comes the BlackBerry 10, a new and improved smartphone platform the company plans to unveil in a Super Bowl commercial this Sunday. With the stock already trading for less than a quarter of its February 2011 share price, it might be worth taking a flier on this bargain basement stock in case the BlackBerry 10 is a hit. Word of the BlackBerry 10 unveiling has already given the stock a 40% boost since Jan. 9. The Super Bowl commercial should at least extend this short-term rally.
- CBS (CBS): The biggest Super Bowl winner may not be the Ravens, the 49ers or any of the dozens of companies whose ads will run, but rather the network that's airing the game. CBS does the honor this year, and if it's anything like last year the game should do wonders for its stock. NBC aired last year's record-breaking game, prompting investors to snatch up shares of the network's parent company, Comcast (CMCSA). After the New England Patriots and New York Giants attracted the largest audience in TV history, Comcast shares shot up 10% in less than three weeks. This year's game should have a similar impact on CBS shares.
The Super Bowl is big business -- both for the companies that shell out big bucks to run their ads and the network that airs the game. While the game won't make or break a company, it's a strong litmus test for which companies resonate with the American public and which don't.
With all of America watching, expect the aforementioned companies to be big winners this Sunday.
Disclosure: No positions.