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Why a B2B startup is placing a bet on a $7M Super Bowl ad

Some people watch the Super Bowl to see the actual football game being played. Many view the event as a halftime show or an excuse to eat wings and other snacks on game day. Some see it to look for better software solutions for their business, maybe?

Papaya Global hopes so. The late-stage global workforce payments startup will run a 30-second ad on Sunday. The ad aims to highlight the company’s software, which helps other companies meet payroll management for cross-border teams. The commercial takes place inside an office and is a relatively mediocre Super Bowl ad compared to Super Bowl stalwarts like Budweiser and McDonald’s, which each year use humor, celebrities, and high production value to grab attention.

However, it is not surprising that Papaya’s announcement is not very eye-catching, considering that Papaya is a B2B software company. While it’s not uncommon for B2B startups to advertise through traditional consumer strategies, running an ad in the Super Bowl is very different from buying ads on a subway in New York or on a billboard on a freeway in San Francisco. . Super Bowl ads cost $7 million for a 30-second spot this year.

Bernd Schmitt, a Columbia Business School professor specializing in branding and advertising, said you don’t see many B2B companies advertising at the Super Bowl because, while it’s a huge audience, it’s too broad to be effective for many companies. But he said there could be at least one reason for doing it: It demonstrates skill and shows that a company has money; that can help companies stand out in a crowded category.

“It gives you bragging rights,” Schmitt said. “Now I can say, ‘Oh, we had a Super Bowl ad.’ Change the image. It seems like you are an important player, a serious player.”

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

“We are in an environment that is no longer a green field,” Malamud said. “We grew into a hypergrowth company and were very successful, but everything was green. “Now we have to fight harder.”

While the exposure means that many new people will be able to learn about Papaya, most people who will see the Super Bowl ad do not need to know about Papaya and will not benefit Papaya by learning about it. But because Papaya works with companies of a wide range of sizes and industries, the ad could have a better return on investment for the business than a B2B company with a more narrow customer focus, Schmitt said.

“If you have the money to do it, it doesn’t seem crazy at all,” Schmitt said. “For a B2B company where a few companies sell to major companies, it seems like a silly idea. “If you have a much more diversified target, very small targets, a long list of all these B2B companies, it might be fine.”

It will be difficult to determine whether the advertising campaign is successful or not. If McDonald’s advertises a burger during the game, you can look at burger sales before and after the game. It’s pretty simple. B2B sales cycles don’t work like that, which makes return on investment harder to quantify. A company could become interested in Papaya following the announcement, but be locked into a contract with another payroll provider for months or years, for example, making it more difficult to track which sales were driven by the announcement.

Hila Perl, Papaya’s communications director, said the company is not thinking of the announcement as a direct lead generation strategy.

“It’s not so we can sell more,” Perl said. “Obviously yes, we want to see a very direct return on investment, but

We all understand that this is a work of brand building or brand awareness. It is not a lead generation work. In my opinion, it’s always more of a marathon than a sprint. “Sometimes it takes those larger investments to plan this ahead and see how the vision translates.”

There really haven’t been many B2B startups that have tried this marketing route to point out. But a line could be drawn between Papaya’s strategy and Squarespace’s. While Squarespace is no longer a startup and has more of a B2B flavor than pure B2B (it helps small businesses build websites), it ran Super Bowl ads for years in its startup days.

David Lee, creative director at Squarespace, told TechCrunch that the company decided to run those ads because it felt like it had a great product that no one had 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 result in a boost in business and brand recognition.

“You’re trying to make sure you’re relevant; it’s a silver bullet that will instantly put you on a map,” Lee said. “Everyone has to decide (if) that investment will be worth it; What I would say is that nowadays it is really difficult to get noticed.”

Although it may be difficult for Papaya to track the direct ROI of the ad, we will know if the company felt it was an overall success if we see a commercial from the company during next year’s Super Bowl.

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