
The startup that’s making a big, expensive bet on a Super Bowl ad this year - prostoalex
http://qz.com/603469/the-startup-thats-making-a-big-expensive-bet-on-a-super-bowl-ad-this-year/
======
frik
Reminds me of Pets.com

" _In January 2000, the company aired its first national commercial as a Super
Bowl ad which cost the company $1.2 million. [...] That ad was ranked #1 by
USA Today 's Ad Meter and had the highest recall of any ad that ran during the
Super Bowl. [...] Although sales rose dramatically due to the attention, the
company was weak on fundamentals and actually lost money on most of its sales.
Its high public profile during its brief existence made it one of the more
noteworthy failures of the dot-com bubble of the early 2000s._"

[https://en.wikipedia.org/wiki/Pets.com](https://en.wikipedia.org/wiki/Pets.com)

------
yid
> In the ad, SoFi vows to propel its members to “greatness,” but says not
> everyone fits the bill. “Find out if you’re great at SoFi.com,” the
> voiceover reads. “You’re probably not.”

If there's one thing the majority of people watching the superbowl love, it's
condescension from a corporation.

~~~
jdietrich
Exclusivity is a common marketing strategy.

The US Marines or the British Parachute Regiment heavily promote their status
as an elite corps. Advertising for theme parks and even toys often uses the
"Are you tough enough?" trope. The Hermes Birkin bag has become one of the
most sought-after items in fashion, precisely because Hermes won't sell them
to the 'wrong' sort of people.

[http://www.npr.org/sections/money/2015/12/25/460870534/episo...](http://www.npr.org/sections/money/2015/12/25/460870534/episode-672-bagging-
a-birkin)

~~~
PhantomGremlin
_often uses the "Are you tough enough?" trope_

But there's a world of difference between "are you tough enough?" and "you're
probably not tough enough".

I agree with the GP poster, condescension won't play well.

------
iamchmod
Tim Arnold pointed to one such success: his own advertisement for GoDaddy.com
in the 2005 Super Bowl. The ad generated 5 million Web hits in 48 hours and
doubled the company’s market share in the months that followed. Writes Arnold,
“It was an outrageous spot that arguably stayed on the right side of the line
of good taste and political impropriety. Viewers gave it mixed reviews, but
GoDaddy’s business went through the roof as a result of it.”
[http://www.adweek.com/news/advertising-branding/super-
bowl-a...](http://www.adweek.com/news/advertising-branding/super-bowl-ads-
work-almost-every-time-125654)

------
dmix
Despite all of the critical comments on here, mass marketing does work for
some products. Especially high margin products with a general mixed-income
user base... such as a financial loan company.

The company is run by someone experienced in running big corp financial loans:

> SoFi is run by CEO Mike Cagney, a former Wells Fargo executive and
> specializes in refinancing student loans for qualified millennials as well
> as personal loans.

So I'm sure he's at least somewhat familiar with the ROI from this type of ad.
Although I fear he's playing big corp marketing game with a small-time
company. $5m in the right hands could be much better spent elsewhere but some
companies lack the creativity/talent to do that effective hit-the-streets type
of startup marketing.

So why not write a single big pay cheque to solve a big hard problem?

~~~
danieltillett
>So why not write a single big pay cheque to solve a big hard problem?

It certainly is lacking in imagination. If this is the best you can come up
with to target your niche then this is a bit of a warning sign that not all is
right inside the company. But then again what do I know :)

------
minimaxir
SoFi's last funding round was a $1 _billion_ Series E. They have money to burn
for marketing.

[https://www.crunchbase.com/organization/social-
finance#/enti...](https://www.crunchbase.com/organization/social-
finance#/entity)

~~~
lawnchair_larry
Series E? Haven't you pretty much failed as a company if you have to go back
to the water fountain that many times?

~~~
wdewind
[https://www.crunchbase.com/organization/uber/funding-
rounds](https://www.crunchbase.com/organization/uber/funding-rounds)

------
Terribledactyl
looks like they bought an ad on qz.com too...

~~~
gruez
Obligatory submarine link

[http://paulgraham.com/submarine.html](http://paulgraham.com/submarine.html)

~~~
nickysielicki
I think it's pretty hard to believe that his vision for Reddit was anything
other than what it is today.

/r/hailcorporate.

------
rmason
Bill Gurley just tweeted:

"Why burn $5MM in a quarter or a month when you can do it in 30 seconds?"

Didn't we learn in the nineties this sort of thing doesn't work?

~~~
forrestthewoods
I wonder how fast you could burn through $5MM in Facebook ads...

------
petke
There is something a bit distasteful with a lender splashing out so much money
on an advertisement. You know in the end its the customers that end up paying
for it with interest.

~~~
ry_ry
I suspect most {Product.Name} customers end up paying for {Product.Name}'s
advertising by purchasing {Product.Name}?

Isn't that kinda the point! ;)

------
randycupertino
Holy cow- their mortgages: "Afford more than you imagined with as little as
10% down on mortgages up to $3M."

Yikes. :-/

------
somberi
More read on Sofi, if you are interested:

[http://www.bloomberg.com/news/articles/2015-12-03/this-
lende...](http://www.bloomberg.com/news/articles/2015-12-03/this-lender-lures-
millennials-with-free-cocktail-parties)

Looks like Martinis are the modern day toasters.

------
ulfw
Oh look, it's 1999 all over again!

------
Animats
SoFi?

Let's seem them beat the ad for So Fine.[1]

[1]
[https://www.youtube.com/watch?v=io53QMwHZ48](https://www.youtube.com/watch?v=io53QMwHZ48)

------
JeffreyKaine
The last "startup" that I saw an ad for in the Super Bowl was salesforce with
an ad for Chatter. How did that work out for them?

~~~
kobayashi
Wix had an ad last year and a friend inside the company told me that they were
thrilled with the ROI.

------
cylinder
I don't think these ads are as powerful as they used to be. The ads aren't as
novel or interesting, and people are generally catching up with their
smartphones during commercial breaks rather than focusing on the ads as
entertainment.

~~~
iambateman
I disagree. That may be true for your crowd, but I know my parents and their
friends will be glued to the ads.

Eventually everyone will be bored, but I don't think it's this year.

~~~
skewart
Your parents aren't SoFi's target market. Their target market are the people
most likely to be looking at their phones.

I agree that it's probably easy for the HN crowd to think mass TV advertising
is over, when it actually isn't. I just think that for certain audiences it
makes a whole lot more sense than others. If I were running a startup looking
to cash in on the huge numbers of boomers entering their senior years then a
Super Bowl ad might make sense. For one targeting not just millennials, but
relatively affluent millennials it makes a lot less sense.

------
sjg007
I think the smart college kids that can refi their student loans already know
about SoFi. For mortgages I think credit unions are still cheaper for the well
qualified.

------
dawhizkid
Yikes.

------
mud_dauber
The one sure way to blow through a million bucks (plus) with little payback.
Terrible decision for any organization - let alone a startup.

~~~
rorykoehler
You have data to back this up? Seems like the exposure for a mass-market
product like sofi might be great in terms of ROI, rather than wasting time in
the tech news circle that most startup PR efforts operate in.

~~~
imron
Yes. See the tech companies advertising in the 1999/2000 superbowl.

~~~
rorykoehler
I'm not sure that is a quality data point. This company is a fin-tech startup
aimed at student loan consolidation. I could be wrong but I would be surprised
if the Super Bowl was not a very good target for them in terms of ROI.

