Press Releases

FOR IMMEDIATE RELEASE - January, 30, 2000

Advertising Super Bowl: As Close as the Football Game

San Diego, CA. The first Advertising Super Bowl of the new millennium was an exciting contest, and even closer than the football game it tracks. Based upon tabulations released today by the American Association of Franchisees & Dealers, a San Diego based trade group, franchised businesses purchased more advertising spots than non-franchised enterprises by the narrow margin of 78 to 76.

Although this was the 12th time in the 13 years of tracking that franchising ads out numbered spots run by companies that do not engage in franchising, this year's score was the closest ever, and .Com companies gave notice they are a marketing force to be reckoned with.

According to AAFD Chairman, Robert Purvin, the results signal a serious challenge to the preeminence of franchising as a marketing juggernaut. Said Purvin, "For at least the last 100 years some form of franchising has reigned supreme when it comes to growing and marketing a commercial business. Almost overnight, the franchise method of distributing goods and services is being challenged by Internet marketing in a serious way."

Purvin added, "This apparent shift in marketing dollars from franchised businesses evidences a looming confrontation between the franchise method of product distribution and e-marketing. Virtually all of the AAFD?s affiliated franchisee groups are raising important concerns regarding how the Internet and e-business will affect their businesses as their parent companies rush to exploit cyber-marketing opportunities." Purvin concluded, "The Internet can be a win-win for franchisees and franchisors if franchise systems address new opportunities in a responsible and cooperative fashion, but I fear there are many internal wars on the horizon."

The strength of the .Com challenge to dominate Super Bowl marketing is further demonstrated when the numbers are broken down. Internet ads exploded to 36 from just 6 last year (and only 1 in 1998). 21 different .Com companies paid the reported record $2.2 million dollar average price for a thirty second spot. 17 of the companies ran just one spot, with 5 companies sharing the remaining 19 spots (led by E-Trade with 6).

By contrast, the 78 franchise related ads included 19 spots by Budweiser and 32 promotional spots by ABC Television Network (which has franchised affiliates). 16 ads were run by other product franchises, including soft drinks and car manufacturers. Only 6 total spots (1 each) were purchased by business format franchisers, including Pizza Hut, NAPA (a Cooperative), National Car Rental (2 spots), Blockbuster and Jack-in-the-Box.

It is also apparent that 21 new e-businesses, loaded with investor capital, drove the cost of a 30 second spot through the roof, and may have driven many traditional franchisors out of the Super Bowl market. The $2.2 million price tag was more than 50% higher than last year and more than double the year before. Nevertheless, with many .Coms vying for markets, the number of total spots during the game swelled from 94 to 154. Pre and post game ads were not considered in the tabulations.

Ironically, the AAFD is launching its own e-business with its new e-Commerce Marketplace for the AAFD Purchasing Cooperative. Located at AAFDco-op.com, and powered by PurchasePro.Com, the new Website provides an exceptional vehicle for franchisee groups to combine to achieve the benefits of group purchasing.

For Chairman Purvin, the AAFD?s new e-Commerce marketplace simply validates that the Internet, if managed appropriately, can be a huge benefit to owners of franchised businesses.

The American Association of Franchisees and Dealers is the oldest and largest direct member non-profit trade association representing the interests of franchisees and independent dealer networks throughout the United States. Stressing market solutions and franchisee empowerment through independent franchisee associations, the AAFD has grown to represent more than 12,000 franchised businesses nationwide.

For more information, contact the AAFD at 800-733-9858, or visit our website.