Saturday, January 31, 2009

How to Watch the Super Bowl for Clues About the Economy

It's all in the ads. Remember, a downturn in the economy is really an adjustment period toward consumption purchases versus capital goods investments, from previous consumption/savings ratio distortions caused by Federal Reserve money manipulation.

NBC is reporting that it has sold the last two of the 67 advertising spots for the Super Bowl, pushing total ad revenue for the event to a record $206 million.

The network said its total of $261 million in ad revenue for all of Super Bowl day also is a record.

I'm not sure how to read this before the actual broadcast of the game. Is this another early sign the worst is over? Or is this another sign the economy is still moving in the direction of consumption versus savings?

The Super Bowl is the premier advertising event with an audience in the U.S. of 100 million viewers, many of whom watch closely during game breaks for the debut of entertaining, big-budget commercials.

Obviously, it's an ideal time to reach the consumer. There's always plenty of beer commercials, but the key is to watch how the other commercials come in. If there are many more immediate consumer satisfaction commercials, then it signals the economy continuing to move in the direction of the consumer. If, on the other hand, there are a significant numbers of big ticket consumer items, such as auto and truck ads, or ads appealing directly to businesses such as Fed Ex ads, biz computer ads, biz consultant ads, then its a very early sign that the Federal Reserve has manipulated the economy back in a direction that will sooner, rather than later, result in improvements of government reported economic data.

I'll be back with a post-game re-cap.

Update: Tim Swanson emails:

Actually, they hit a brick wall in September and were unable to find any outside buyers for 5 minutes worth of ads (10 thirty-second segments) which is a loss of $30 million in revenue. For instance, traditional buyers like GE and FedEx didn't buy any at all, while Monster and CareerBuilder did. NBC has had to revert to the time honored tradition of promoting internal productions such as their spring line-up of tv shows.
For my re-cap, I'll count internal NBC promotions in a separate category as an indication of fear, whereby advertisers aren't willing to spend the money to reach the markets.

So now I am watching three types of ads:

Consumer type ads

Capital goods type ads


Internal NBC ads

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