The 2010 Super Bowl is expected to be a return of bold advertising. Whether you are a Colts or Saints fan or no fan at all, it seems that even the non-sports lovers enjoy the commercials running during the Super Bowl. With a cost of $2.5 million for a 30- second spot, this can be a very high risk or very high reward for some companies. Some of these companies have a lot to win from the commercials, and some have something to lose. We wanted to take a look at some of the public company advertisers to see if the add-on boost from the ad spending is worth it. Denny’s Corp. (NASDAQ: DENN), Diamond Foods, Inc. (NASDAQ: DMND), Electronic Arts Inc. (NASDAQ: ERTS), E*TRADE FINANCIAL Corp. (NASDAQ: ETFC), Monster Worldwide, Inc. (NYSE: MWW), Motorola Inc. (NYSE: MOT) and Qualcomm Inc. (NASDAQ: QCOM) are the ones we see potential wins or losses that can make enough of a difference for shareholders. There are other companies, but we wanted to see which might see the biggest impact for holders.
Denny’s Corp. (NASDAQ: DENN) is taking a chance. With a mere $293 million market cap, every dollar counts here. The company said that Americans were pleasantly surprised last year when it announced during the Super Bowl that it was offering a Free Original Grand Slam® for one day at its restaurants nationwide. After pioneering the way for giveaways and feeding 2 million grateful Americans who took advantage of the offer… 2 million? You’ll have to do the math if that is a one-time bump only…. If it adds loyal customers who need to dine the cheap, it’s a win. If it’s a one-time event, well that is another issue. For a company with revenues in decline, this is a chance.
Diamond Foods, Inc. (NASDAQ: DMND) is now worth $623 million in market cap. Not bad for nuts and snacks. But the stock has been an incredible growth story and is effectively close to multi-year highs. Diamond Foods will launch http://www.letsgetaquatic.com just after the National Anthem of the Super Bowl. For a company with low cash, it is a toss-up over how well this will bump the company.
Electronic Arts Inc. (NASDAQ: ERTS) will be offering a sneak peek at Dante… One game cannot make a company like EA bump, but it may prove to be very cheap advertising for a company down on its luck. EA is sitting on a mountain of cash, but it has treated its shareholders poorly if you look at its stock price. This is probably a draw, unless it makes many more buy the Dante game who were not interested.
E*TRADE FINANCIAL Corp. (NASDAQ: ETFC) is back with the talking toddler or infant making adults who do not use E*TRADE feeling dumb. E*TRADE has been embroiled in loan losses and the recent price cut at rivals Schwab and Fidelity make each new customer add potentially and less and less valuable for future earnings.
Monster Worldwide, Inc. (NYSE: MWW) just had an awful week. The company’s earnings report failed to show any excitement nor a rapid return of job growth (even with a 9.7% unemployment reading) and on its HotJobs acquisition. Rival Career Builder is advertising as well. Monster has had great ads in the past, but the question comes down to whether it can get more companies to advertise their jobs. With 16.5% of the population under-employed, they should have their readership tied up.
Motorola Inc. (NYSE: MOT) has been in trouble for some time. It is doing teases of its ad for MOTOBLUR on its site. If we asked you which cell phone maker in the U.S. had the most trouble, you’d say “Hello… Moto… .” Still, it has billions of cash. It is almost inconceivable that Motorola can win back the world of smartphones even with the Droid….
Qualcomm Inc. (NASDAQ: QCOM) is advertising its FLO TV company-backed product, which is a very new approach for a company that has been light on retail products of its own. It looks like it has three advertising slots, so this is a big bet. Some said they were spending close to $10 million in this promotion. This will be a push for the mobile TV, and it seems that if this doesn’t sell a bunch of those units to a bunch of sports fanatics then nothing will. At $249.00 plus a subscription, this could have a large payoff if it works. And we know how bad Qualcomm did after it brought down its per-unit forecast for 2010.
And the best use of your tax dollars in the world of fiscal deficits???? The Census Bureau is dropping $2.5 million to get faster returns. Smart… Not.
Enjoy the big game… or the commercials!
JON C. OGG