Why Super Bowl auto ad spending is trending down

Last year’s Super Bowl drew a significant number of auto advertisers despite a supply shortage that caused brands to think twice about spending big on marketing to spur demand. The game emerged as a tool to broadcast big electric vehicle investments by those shelling out millions of dollars to appear in commercial breaks, including Kia, BMW, General Motors and EV startup Polestar.

But this year—even as EV sales continue to rise—larger economic concerns are keeping automakers on the sidelines, including softening demand that is forcing more execs to scrutinize budgets.

“Clients are being very cautious about how much they spend,” said one ad agency executive who works on automotive and spoke on the condition of anonymity. “Does it make sense to frontload the year with a big Super Bowl ad? Probably not.”

So far only one auto brand—Kia—has confirmed an ad buy in the Feb. 12 game on Fox. And while more automakers are likely to jump in, it seems nearly certain that category spending on the game will be down from last year, when six automakers ran a total of eight ads.

Toyota, which ran two spots in 2022, confirmed it won’t be back, as it sits out the game for the first time since 2017. The automaker, one of the few brands that did not specifically advertise EVs in the 2022 game, declined to comment beyond its original statement that “this year’s timing did not align for our brand” and that “every year we evaluate this advertising opportunity to support upcoming product launches or key Toyota moments.”

Representatives from BMW and Nissan, infrequent Super Bowl advertisers that appeared last year, also confirmed they won’t air 2023 ads. Polestar, a rookie Big Game advertiser last year, is also not returning. GM—which ran two ads last year—has not commented on its 2023 plans. Another automaker that could possibly jump in is Stellantis. The Jeep owner sat out last year but is known for releasing its plans just a few days in advance of the game.

Online used-vehicle retailers Carvana and Vroom—which ran ads last year—are also not coming back.

Fox, which will broadcast the Feb. 12 game, declined to comment on auto ad sales trends.

Higher interest rates and supply issues

Even if Stellantis and GM jump in, barring any other surprises it seems the auto category will fall below or match the category's recent low of 2021, when just four ads ran from three automakers. That year, automakers sat it out as they dealt with pandemic complications, including dealership closures that dented sales.

This year, sales are soft for economic reasons including higher interest rates, and the industry continues to slowly recover from supply chain issues caused in part by semiconductor shortages. U.S. auto sales fell 8% to under 14 million vehicles in 2022—the lowest level since 2011, Automotive News recently reported.

“The auto industry’s volume recovery in the U.S. and Europe is unlikely before 2026 due to supply disruptions, while softening demand poses risks to sales volumes,” Nishit Madlani, an auto credit analyst for S&P Global Rating, said in a statement this week, adding that “higher interest rates will dampen economic prospects in the U.S. and Europe, which will likely raise affordability issues and increase pressure on prices.”

“Auto manufacturers are still working through supply shortages, and big Super Bowl ads aren't needed to drum up interest for vehicles that are still in short supply,” said Jessica Caldwell, executive director of insights at Edmunds, which provides car shopping information to consumers.

Last year, automakers that ran Super Bowl ads brushed aside supply concerns, adopting a longer-term goal to plug their EV ambitions. For instance, GM’s buy included a corporate spot that continued its “Everybody In” campaign that aims to democratize EVs, while BMW plugged its electric BMW iX with some help from Arnold Schwarzenegger.

But according to Caldwell, there is now less of a need to spend big on EV awareness. “Consumers' natural curiosity about EVs has afforded automakers an ability to spend less on advertising and still attract significant attention to their tech advancements,” she said in an email interview. “As EVs become more of a commodity in the coming years, advertising will once again be necessary to break through the clutter, but at this point, the vehicle tech is still novel enough to be doing the talking for these brands.”

Ford Motor Co. CEO Jim Farley put it more bluntly last year during a talk at the Bernstein Strategic Decisions Conference, saying, “If you ever see Ford Motor Co. doing a Super Bowl ad on our electric vehicles, sell the stock.” 

There could be another factor at work this year: Investors are less enamored with the kind of grand electrification announcements put out by so many automakers last year, suggested Mark Wakefield, global co-leader of the automotive and industrial practice at AlixPartners, a global consultancy. “If you went out and said, ‘I'm going to spend 10 billion on battery plants and electric vehicles last year, your stock would go up,” he said. “That same dynamic is not the case today,” he said, adding that investors now have more rational questions, like “what does your balance sheet look like?”

Long-term play

Kia, which plugged its electric EV6 in last year’s game, for this year’s ad will highlight its gas-powered 2023 Telluride X-Pro, said Kia America Marketing VP Russell Wager. He did not disclose creative details on the ad from agency David&Goliath. Kia was one of a few brands to increase market share last year and is riding a hot streak after posting sales records for December and the fourth quarter, as reported by Automotive News.

Wager, in an interview with Ad Age, acknowledged that some supply issues remain. “We still can't make enough to meet the demand,” he said. But making Super Bowl decisions based on today’s supply is “a short-term game,” he said. “We're doing it to keep our [brand] top of mind, to keep people putting us onto their consideration list three, six, 12 months down the road.”

Kia had the same conversation last year when it opted to highlight the EV6 in the Super Bowl. While Kia “sold over 20,000 of them, you don't go into the Super Bowl sell 20,000 cars,” he said. “You go into the Super Bowl to say, ‘Hey, we are a serious competitor when you think about electrified vehicles.’”

Hyundai—which has not advertised in the Super Bowl since 2020—is opting to highlight one of its EVs with ads running during this weekend’s AFC and NFC championship games, rather than in the Big Game.

The brand will pay about one-third the cost of a Super Bowl ad (which this year is running as high as $7 million for 30 seconds), but still get in front of a huge audience, said Angela Zepeda, chief marketing officer at Hyundai Motor America. (Last year’s championship games averaged 49 million viewers, while the Super Bowl drew about 100 million.)

Hyundai’s campaign features its electric Ioniq 6 and stars actor Kevin Bacon and his daughter, Sosie Bacon. One ad, called “Your Dad Is Going Electric,” is meant to normalize eclectic vehicles, even for dads who might not be as technologically savvy as their kids. It comes from creative agency Innocean with Canvas handling the media buys.

Zepeda said Hyundai still considers doing a Super Bowl spot every year. “It's always a big debate,” she said. But this year she acknowledged that there are a lot of “headwinds” for the auto industry, and “I think everyone's probably thinking about their budgets in a very conservative way.”

Hyundai opted to deploy part of its budget to become the exclusive automotive sponsor for The Walt Disney Company’s 100th-anniversary celebrations that are expected to culminate in the fall. Plans are still being finalized but they will likely include new campaigns, original content launches, experiential activations, as well as merchandising connected to Disney intellectual property, as Ad Age reported last year.

The deal allows Hyundai to extend marketing over a longer period than a single Super Bowl ad.

“It’ll probably really kick off in the second quarter, and then a little crescendo in the last quarter,” Zepeda said in an interview this week.

“We just want to be very careful about how we spend our dollars,” she said. “We're being ambitious. But we also want to be very thoughtful. And I think other brands are being that way, too.”