FedEx opts out of 2009 Super Bowl advertising
On first blush, FedEx's decision to skip the Feb. 1 Super Bowl XLIII broadcast on NBC seems to make as much sense as one of the Super Bowl teams volunteering to abandon the forward pass.
FedEx, after all, has been using Super Bowl commercial breaks to build brand awareness for 18 years, dating back to 1989. And it is the NFL's official delivery service sponsor. But there's a time and place for everything, FedEx wrote in a Monday blog post:
As a country, we are in unprecedented economic waters. And as a responsible employer of more than 290,000 employees and contractors worldwide, there is a time to justify such an ad spend and a time to step back.
As FedEx employees, we, like millions of people at other companies, are being asked to do more with less. Our most vital asset is the thousands of FedEx team members who truly enable the world to work, absolutely, positively, every day. In the ultimate medium when where the message is king, being in the game simply sends the wrong message both to employees and other FedEx constituents. A Super Bowl ad buy is not where we should put dollars at this time although, in the past, the value of doing so for FedEx has been indisputable.
Publicly traded FedEx has good reason to be acting the part of good steward. Its stock is trading at about $60, down from a 52-week high of just below $100. Though fuel costs are down, so is the package delivery business.
Last week, FedEx initiated broad cost-cutting efforts aimed at countering what Chairman, President and Chief Executive Frederick W. Smith described as "some of the worst economic conditions in the company’s 35-year operating history.” The cuts include a hiring freeze, the suspension of company contributions to employee 401k retirement plans and across-the-board cuts for salaried employees and management.
NBC has been talking about charging $3 million for a 30-second spot during the Feb. 1 broadcast. That's significant money, even for FedEx, which currently is No. 116 on Advertising Age magazine's Top 200 Megabrands. The company spent $156.9 million on advertising and marketing in 2007, up from $146 million a year earlier.
FedEx said it likely will return to the Super Bowl broadcast. But its decision to sit this one out could pain NBC, which already has seen financially struggling General Motors opt out.
"This will put some sales pressure on NBC, and it's rate card may take a beating," Advertising Age columnist Bob Garfield wrote in an e-mail. "Mainly, it's a reflection of the economy, but it could not come at a worse time for NBC or broadcast in general.
"The Super Bowl should be one of the few franchises that survives the collapse of the teetering broadcast-business model," Garfield wrote. "If NBC can't sell that out at or near its asking price, the networks had better start running for their lives."
When asked if other Super Bowl advertisers were likely to follow suit, Garfield responded: "I have absolutely no data on this concerning the deliberations at any particular advertiser, but let's just say I expect the big winner to be fear."
Michael Belch, a San Diego State marketing professor, isn't buying FedEx's logic.
"I don't think it's a very smart move at all," Belch said this morning during a telephone call. "It's kind of like saying, 'We're on the skids, so let's cut the marketing budget.' It's exactly the wrong thing to be doing.
"I'd argue that you could more easily justify staying there than cutting if you really believe that advertising works," Belch said. "The other thing is that the word of mouth you get from a Super Bowl ad is worth well more than the millions you spend."
The issue facing advertisers that will be making product pitches during the Super Bowl broadcast is whether it makes sense to throttle back a bit on the humor because of the raw nerves in many households caused by the troubled economy.
That would seem to be the wrong move. Fans turn in for a good game and funny commercials. FedEx will be missed because its recent spots -- including the one in which the unfortunate cave man gets fired because he didn't use FedEx (no matter that it hadn't yet been invented) -- are funny.
Just the thing, it would seem, to take minds off of a bad economy.
Here's an Advertising Age list of which companies are buying time during the Super Bowl broadcast from Tampa, Fla.
-- Greg Johnson
Photo: A still shot taken from FedEx's 2006 Super Bowl commercial. Credit: FedEx