The Market's Fine Print

Does Advertising Pay?

The question "does it pay to advertise?" has been kicked around ever since King Tut started selling billboard space in his tomb. (DTN photo illustration by Scott Kemper)

What do you suppose would have happened if the Beef Board had decided to spend its entire 2015 collection of check-off dollars (roughly $40 million) on Super Bowl ads last Sunday? How much positive or negative buzz could the cattle industry generate with a short four minutes (that's right, $5 million per 30 seconds) of the primest of prime time?

A sudden explosion in hamburger and steak consumption?

Congressional investigators foaming at the mouth?

A new range war that makes ISIS rage look like a tea party?

Those of you who think I've stacked the deck with these possibilities may be part of the problem in seriously growing beef demand. Believe me, I don't mean to be rhetorical in considering the real consequences of aggressive advertising. All three reactions strike me as having real potential.

Yet if I'm entirely honest, the latter two probably seem like better bets. On one hand, the magic of advertising can be as mystifying as Penn and Teller in Vegas. Pulling demand out of thin air on a regular basis just seems tough to bank. On the other, organizing cattle country for ambitious ventures in check-off spending has never been a walk in the park.

Think herding feral cats, only not so easy.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

The question "does it pay to advertise?" has been kicked around ever since King Tut started selling billboard space in his tomb. The more expensive the business strategy becomes, the more head scratching ensues. The latest crop of high-dollar ads presented around the Super Bowl was perhaps made more dazzling by the defensive monotony of the Broncos and Panthers. Still, I had trouble imagining how these richly produced commercials had a prayer in paying for themselves.

That's not to say I didn't enjoy a good chuckle now and then. Heck, a few of the clips even momentarily caused my chest to swell and eyes to water.

For example, the dachshunds in hotdog buns stampeding toward Heinz ketchup and mustard dispensers were pretty darn funny. The same goes for Willem Dafoe in drag transformed to Marilyn Monroe by a Snickers bar.

And I was a bit moved when the old and depressed astronaut was spiritually restored when his thoughtful, money-is-no-object son put him behind the powerful wheel of an Audi R8. Furthermore, you had to be a major grump not to like the NFL's own ad on Super Bowl babies, a musical montage consisting of old and young kids conceived immediately in champion cities over the last five decades. It was certainly cheesy and certainly cool.

But where is the exact economic model that clearly demonstrates how humor and schmaltz and soulful music exponentially translate into a previously untapped revenue surge? I honestly don't get it. And those are the ads that I liked.

For every several ads that mildly charmed on Sunday, one would cue-up to be unbelievably bad and annoying. Take the Mountain Dew ad featuring the hideous "puppymonkeybaby," an odd creature that tantalizes (I'm guessing here) would-be pop drinkers by licking faces. What was that all about? Equally curious was the camper who finds himself on a romantic weekend with a marmot.

Perhaps these companies successfully planted their paydays in my thick noggin. But so far I have successfully resisted the temptation to purchase either a puppymonkeybaby or marmot.

Yet my shortsighted inability to understand how advertising works doesn't mean it doesn't. Indeed, CBS apparently had no trouble selling all the spots, collecting close to $380 million in just four hours. Good work if you can get it.

Who knows? Maybe Super Bowl ads are exactly what the beef doctor would order -- that is, if his fees were preauthorized by check-off-funding producers. Returning to my opening scenario, the most likely reaction would be rancor and resentment among the rank and file of cattle country.

Prior to its adoption in the late 1980s, it took decades for cattle feeders and ranchers to agree on a check-off program of $1 per head. Frankly, the much-needed compromise didn't sufficiently fund promotion needs to begin with. Nearly 30 years later, the puny buck is still the puny buck, total herd size has contracted, and advertising rates have nearly doubled.

Many producers have been working hard to raise the national per head from $1 to $2 in recent years, but they've encountered countless speed bumps and obstacles raised by organizations that apparently value their own political clout more than the viability of meaningful beef promotion.

In the hubris of a bygone age, many cattlemen truly believed that the product would sell itself. After all, beef was the Cadillac of the meat case. No one believes that today, not given how its market share has been slashed over the last half century. In fact, I wager that the vast majority would at least give lip service to "it pays to advertise."

Given the way beef prices have struggled over that last year, you wouldn't think it would take a Super Bowl to put money and mouth together.

John Harrington can be reached at feelofthemarket@yahoo.com

Follow John Harrington on Twitter @feelofthemarket

(AG)

P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]
P[R1] D[300x250] M[300x250] OOP[F] ADUNIT[] T[]
P[R2] D[300x250] M[320x50] OOP[F] ADUNIT[] T[]
DIM[1x3] LBL[] SEL[] IDX[] TMPL[standalone] T[]
P[R3] D[300x250] M[0x0] OOP[F] ADUNIT[] T[]