Are Super Bowl ads a super waste of money? Examining the intermediary roles of customer-based brand equity and customer equity effects

Prior research on the impact of marketing activities such as Super Bowl advertising on firm value has produced mixed results. Drawing on the marketing productivity chain, this study introduces hitherto neglected customer-based brand equity effects as indicator for investors' expectations about future customer equity effects (i.e., expected future cash flow deviations) and find that customer-based brand equity mediates the relationship between Super Bowl advertising and abnormal stock returns. Using event study methodology, the authors analyze a sample of 62 ads for which data is available on both measures that represent brand equity and stock price from the Super Bowls from 2008 to 2012. This study finds that Super Bowl ads can be worth the large investment, but only if they enhance customer-based brand equity. The reverse also holds in that a negative impact on stock return is expected when a Super Bowl ad reduces customer-based brand equity. Furthermore, empirical evidence suggests a ceiling effect, that is, for brands with high pre-Super Bowl brand equity the relationship between change in customer-based brand equity and stock return is significantly smaller.