Why a B2B startup is betting on a $7 million Super Bowl ad


Some people watch the Super Bowl to see the football game in progress. Many watch the event for the halftime show or as an excuse to eat wings and other snacks on game day. Some look at it to look for better software solutions for their business – maybe?

Papaya Global hopes so. The late-stage global workforce payments startup is releasing a 30-second ad on Sunday. The announcement aims to highlight the company’s software, which helps other businesses stay compliant with managing payroll for cross-border teams. The commercial takes place inside an office and is a relatively lackluster Super Bowl ad compared to Super Bowl mainstays like Budweiser and McDonald’s, which use humor, celebrities, and high production value every year to draw attention.

It’s not surprising, however, that Papaya’s advertising isn’t very flashy, given that Papaya is a B2B software company. While it’s not uncommon for B2B startups to advertise through traditional consumer strategies, running an ad at the Super Bowl is very different from buying ads on the New York subway or on a billboard. display of a San Francisco highway. Super Bowl ads this year cost $7 million for a 30-second slot.

Bernd Schmitt, a professor at Columbia Business School who specializes in branding and advertising, said you don’t see many B2B companies advertising at the Super Bowl because, even though it’s with a huge audience, it is too broad to be effective for many businesses. But he added that there might be at least one reason to do so: It demonstrates prowess and shows that a company has money; this can help businesses stand out in a crowded category.

“It gives you bragging rights,” Schmitt said. “Now I can say, ‘Oh, we had a Super Bowl commercial.’ It changes the image. It looks like you’re a major player, a serious player.

Standing out was a key reason why Papaya decided to advertise the Super Bowl, according to the company’s vice president of brand and communications, Jessica Malamud. Malamud said the employee payment space has become more crowded since the company’s initial launch. Startups like Oyster HR and Remote have gained traction. Additionally, name recognition is also very important in a category like payroll service providers.

“We are in an environment that is no longer a green field,” Malamud said. “We grew and became a hypergrowth company and had a lot of success, but it was all green. Now we have to fight harder.

Although the exposure means that many new people will be able to learn about Papaya, the majority of people who see the Super Bowl commercial do not need to know about Papaya and will not benefit Papaya from learning about it. But because Papaya works with companies of all sizes and industries, advertising could have a better return on investment (ROI) for the company than a B2B company with a narrower customer focus, Schmitt said.

“If you have the money to do it, it doesn’t seem completely crazy,” Schmitt said. “For a B2B company some of which sell to large corporations, this seems like a silly idea. If you have a much more diverse target, very small targets, long tail of all these B2B companies, that may be acceptable.

It will be difficult to know whether the advertising campaign is successful or not. If McDonald’s advertises a hamburger during the game, it can look at hamburger sales before and after the game. It’s pretty cut and dry. B2B sales cycles don’t work like this, making ROI harder to quantify. A business might become interested in Papaya from advertising, but be tied into a contract with another payroll provider for months or years, for example, making it harder to track advertising-generated sales.

Hila Perl, communications director at Papaya, said the company doesn’t view advertising as a direct lead generation strategy.

“It’s not about selling more,” Perl said. “Obviously yes, we want to see a very direct return on investment, but we all understand that it’s a brand building or a brand awareness play. This is not a lead generation game. In my mind, it’s always more of a marathon than a sprint. Sometimes it takes larger investments to plan this in advance and see how the vision translates.

There really aren’t many B2B startups that have tried this marketing route. But we could draw a line between Papaya’s strategy and that of Squarespace. Although Squarespace is no longer a startup and is more B2B oriented than directly B2B (it helps small businesses build websites), it ran Super Bowl ads for years in its days. startup.

David Lee, chief creative officer at Squarespace, told TechCrunch that the company decided to run these ads because it felt like it had a great product that no one had ever heard of. Squarespace was already profitable with money to spend. It wouldn’t be the right strategy for every startup, Lee said, but it did lead to an increase in activity and brand recognition.

“You’re trying to make sure you’re relevant; it’s a silver bullet to instantly put you on a map,” Lee said. “Everyone must decide [whether it will] it’s worth it for this investment; what I would say is that it’s really hard to get noticed today.

While it may be difficult for Papaya to track direct ROI from advertising, we will know if the company felt like it was an overall success if we see an ad from the company during the Super Bowl in next year.


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