Super Bowl Movie Trailers: The Business Behind the Hype

Every Super Bowl, a handful of movie trailers are shown. Do they correlate with box office success?

Jan 26, 2014 at 4:00AM

It's no secret that the Super Bowl -- and its commercials -- are a huge deal. Last year's game was the most watched night of primetime TV since Nielsen began tracking the stat in 1987, and the average cost of a 30-second ad was $4 million, according to CNN Money.

Of the nearly four dozen commercials that typically run during the Super Bowl, movie trailers usually represent about 25% all spots.

Do they precede success?

Since 2008, there have been 68 movie trailers during the Super Bowl.

Football

Sources: Media reports and Teaser-Trailer.com. Background image via Daniel X. O'Neil, and resized/edited for graph. *Budget data via Box Office Mojo. **ROI calculation based on gross profits via author's calculations. The spike in 2011 can be attributed to an influx of lower-budget movies, and two rare flops that lost money -- Take Me Home Tonight and Drive Angry -- may explain why studios were hesitant to use that strategy again in 2012 and 2013.

Most of these films have bigger budgets than the MPAA mean of about $100 million; they're larger by about 25% on average. In terms of return on investment, this group has been more than five times as successful as the movie industry norm of 36%, according to an estimate from The Dove Foundation.

Over the past six years, 90% of all movies with a Super Bowl ad made money, and 60% of the time, they generated an ROI above the industry standard.

Going further, films that were part of a franchise were profitable 100% of the time, and every single one had an ROI of at least four times greater than the industry norm.

On average, this group was twice as profitable as non-sequels with Super Bowl ads in the given time frame. Most empirical research shows that sequels are more profitable than non-sequels, but the differential is generally not this large.

There's no way to prove causation -- studios could simply promote their best projects during the game -- but two things are clear: (1) Super Bowl trailers are correlated with above-average box office performance, and (2) franchises dominate football's biggest night.

What studios are involved?

Three studios are ahead of the pack. Viacom's (NASDAQ:VIAB) Paramount, Comcast's (NASDAQ:CMCSA) Universal, and Disney (NYSE:DIS) are responsible for about 75% of all Super Bowl movie trailers since 2008. 

Studios That Have Advertised During the Super Bowl
2008-2013
Studio No. of Super Bowl Ads Average ROI Average Budget
Paramount 20 215% $135,900,000
Universal 16 167% $102,937,500
Disney 13 245% $201,153,846
Columbia 6 148% $80,000,000
Relativity 6 249% $26,833,333
Lions Gate 3 416% $49,333,333
20th Century Fox* 3 109% $87,500,000
New Line 1 -20% $55,000,000

Sources: Media reports and Box Office Mojo. *ROI and budget figures don't include the 2012 TV spot for Star Wars: The Epic Saga Begins (re-release of Star Wars Episode I in 3D).

Each has its own strategy.

The behemoth
Paramount typically promotes its flagship films during the game, and past spots have marketed both Star Trek reboots, the last two Transformers films, RangoWorld War Z, and Thor, among others.

World

Source: IMP Awards.

Of the 20 trailers the studio has shown since 2008, only two -- Drillbit Taylor and Justin Bieber: Never Say Never -- were for movies that made less than $100 million in profits. None lost money. 

The mixer
Universal, meanwhile, has almost equalled Paramount's appetite for Super Bowl commercials, though it uses them a bit differently. In addition to summer blockbusters such as Battleship and Cowboys & Aliens, Universal likes to mix in trailers for lower budget movies with earlier release dates. Examples include 2008's Leatherheads and 2011's The Eagle, but interestingly, none of its smaller efforts have generated an ROI above 30%. 

This, and the fact that Universal has whiffed in the past with Land of the Lost and The Wolfman, explains why its movies with Super Bowl spots haven't been as successful as others.

The franchiser
Disney's Super Bowl ad strategy is simple: focus on existing franchises. Most have featured series add-ons like Iron Man 3, Pirates of the Carribean: On Stranger Tides, and Toy Story 3, and its 2012 trailer for The Avengers was part of a marketing campaign that pushed the superhero film to the third-highest box office total of all-time.

Along with Alice in Wonderland, which was marketed during the 2010 Super Bowl, each of these five Disney films has grossed over $1 billion worldwide -- something only 12 others have ever done. That's why the company's ROI in the chart above is pushing 250% -- quite an accomplishment considering the enormity of its average budget.

The only semi-disappointments in Disney's Super Bowl arsenal have been films that aren't part of a franchise, like The Lone RangerJohn Carter, and Race to Witch Mountain, though none have lost money.

The mid-level players
Below this top three, there's a tier of four mid-level players that focuses on smaller-budget projects for the Super Bowl.

The films promoted by 21st Century Fox's (NASDAQ:FOX) 20th Century Fox and Sony's (NYSE: SNE) Columbia cost $82 million on average to make, and for the most part they've succeeded. Fox's biggest Super Bowl success was Jumper and Columbia's was Vantage Point. Both were released in the few weeks following the 2008 contest, and each grossed nearly three times its budget.

Relativity Media fits in this middle tier, and it also uses the Super Bowl to promote its smallest films. The studio's six trailers over the past six years have included winners like Battle: Los Angeles and Limitless, but 21 and Over, The Crazies, and Take Me Home Tonight all booked profits less than $35 million, and the latter lost money.

Additionally, Lions Gate's (NYSE:LGF) profitability metrics are off the charts from 2012's The Hunger Games, and last year's Snitch made $28 million on a budget of $15 million. However, 2011's Drive Angry lost a whopping $26 million.

The weakling
Time Warner's (NYSE: TWX) New Line Cinema experienced a mini-armageddon when it advertised for eventual box office bomb Semi-Pro in the 2008 Super Bowl. It made just $43 million on a budget of $55 million, and like a few other failures on this list, it didn't help that the film wasn't a sequel.

Semi

Source: IMP Awards. 

The comedy's failure to break even probably explains why the studio hasn't paid for a Super Bowl ad since. 

The future
With a week until the big game, rumors suggest that at least four films will have trailers: Paramount's Transformers: Age of Extinction, Disney's Need for Speed, Columbia's The Amazing Spider-Man 2, and Lions Gate's Draft Day. Of these, the most likely to succeed in a big way are Transformers: Age of Extinction and The Amazing Spider-Man 2 because -- you guessed it -- they're part of existing franchises.

Other candidates that could appear during the Super Bowl include Guardians of the Galaxy and Captain America: The Winter Soldier from Disney, and judging by the data, I also expect Universal and Relativity to promote one of their projects; films like A Million Ways to Die in the West and Earth to Echo would make sense.

On the whole, though, it's unlikely that a 2011-type year is in the cards when 19 films were marketed, and if history repeats, big budget films from the "big three" studios will dominate the night. There's no foolproof way to guarantee that a Super Bowl spot will lead to success at the box office, but if I were a studio executive, I'd be focusing on the franchises.

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Fool contributor Jake Mann has no position in any stocks mentioned. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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