Why is a B2B Startup investing in a $7M Super Bowl Advertisement?

While the Super Bowl is best known for its football and halftime show, it’s also famous for its adverts. This year, payroll software startup, Papaya Global, is hoping to catch the attention of some viewers with a 30-second ad – even if it won’t have the same glitz and glamour of commercials by Budweiser and McDonald’s.

Given that Papaya is a B2B software company, it’s no shock that its advertisement isn’t extravagantly flashy. While B2B startups often use standard consumer advertising strategies, launching a Super Bowl ad is an entirely different ball game compared to conventional ad spaces like New York City subways or San Francisco highway billboards. This year, a brief 30-second slot during the Super Bowl comes with a hefty price tag of $7 million.

Columbia Business School professor, Bernd Schmitt, says B2B companies seldom advertise during the Super Bowl as the broad audience may not be effective for many. However, it does flex the company’s prowess and helps them stand out in a crowded market.

According to Jessica Malamud, Papaya’s VP of Brand and Communication, the company decided to advertise during the Super Bowl to stand out in the increasingly crowded employee payments space. While most Super Bowl viewers won’t need Papaya, the exposure could result in a good ROI as the company caters to businesses of all sizes across different industries.

Assessing the success of the ad campaign will be challenging. Unlike McDonald’s, which can directly compare burger sales before and after the game when they run an advertisement, the B2B sales cycle is not as straightforward, making it difficult to measure ROI. For instance, a company could become interested in Papaya after seeing the ad, but if they are already engaged in a contract with another payroll provider, they might not become a customer for months or even years. This makes it less clear cut to determine which sales were directly prompted by the advertisement.

Papaya isn’t expecting a direct lead-generation strategy but views the ad as a brand building and awareness play, says Hila Perl, the company’s director of communications.

Accentuating the benefits of Super Bowl ads, Squarespace’s Chief Creative Officer, David Lee, noted that its Super Bowl ads in its start-up days helped boost business and brand recognition. If Papaya re-runs its commercial next year, it could suggest that the company considers its Super Bowl ad a success.