NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

What Do You Make of the Super Bowl Ad Shuffle? 

What’s most interesting about the advertising at the big game is the number of big names that are missing. That says a lot about the national mood. 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

FEB 10, 2025

One of things that puzzles me about Super Bowl advertising is that the media thinks that ranking and commenting on the ads is far more pressing than reporting on Elon’s latest criminal activity or Trump’s latest invasion threat. So, given that glut, I won’t trouble you with my reactions to the various ads other than to note that, with the exception of Bud (and the Clydesdales—young and old) and Michelob (just two crafty Pickleball hustlers), it seems like all of the old-fashioned heart and emotion is missing from this year’s roster.

Warm and fuzzy has gone out of style. High hopes and friendly folks are passé. Apparently, substituting random celebrities and athletes, using a lot of music and CG effects, and making many of the ads slightly snide or snarky (“we don’t judge”) is what passes for creativity now. I’d take the old Coca-Cola ads over this tripe any day.

But what’s most interesting is how the ad scorecard for this event is actually a very instructive barometer in some ways for how various players, industries, and products are faring in the post-pandemic economy. Most striking is the amazingly large number of traditional players, big spenders, and industry leaders in multiple sectors who elected to bail out and ignore the whole shebang. Close to a dozen brands called the option play and canceled their earlier buys and space reservations.

Some Brands Aren’t Playing Ball

The only abrupt departure that makes clear and obvious sense is the insurer State Farm, given the California calamities although — to be honest — Mahomes might as well have the logo tattooed across his forehead for all his omnipresence in their ads.

But looking at the sector-by-sector absentees says a whole lot about our economy, our near-term prospects and the degree of confusion and uncertainty that to some extent we’re all victims of right now. You can draw your own conclusions, but here are some of the most relevant facts and figures.     

The auto and alcohol folks used to drive and saturate the whole four-hour extravaganza. This year there were zero General Motors or Ford ads; among traditional American brands, only Stellantis’ RAM and Jeep ads appeared. And alas the Caesars Superdome Stadium is no longer named for Mercedes-Benz.

This ghosting isn’t that difficult to understand when you look at where automotive advertising ranks now in general. In 2012, car ads accounted for 40 percent of overall commercial airtime; by 2024 that number had plummeted to around 8 percent. Tesla, by the way, has never advertised on TV—although the exploding Cybertrucks make great visuals and get plenty of media attention. But not to worry; its Model 3 sales are falling apart all over the world, with California sales down close to 40 percent thanks to the popularity of President Musk.

You’d think that the audience for the big game would absolutely be the ideal target for new car sellers since it historically skews so strongly male — Swifties aside, of course. But, interestingly enough, if you ask any of the AI systems, they will tell you that (a) automobile purchases are largely joint husband and wife decisions, with teenagers occasionally acting as consultants, and (b) that the gender gap in game viewership is continuing to close, with men now about 54 percent of the total viewers.

Beer’s Still Here

In alcohol, Anheuser-Busch InBev, the Brazilian-Belgian-American beer monster, owns so many brands that its ads are just about the only ones you’ll see apart from a Coors Light piece that doesn’t really move the needle. One of the AB ads—a super-macho mashup of Post Malone, Peyton Manning and Shane Gillis—is what the industry pros are calling an apology ad from Bud Light for its huge blunder in 2023 when the brand launched a super “woke” social media campaign featuring a transgender activist. We’ll see how forgiving the MAGA crowd will be, although nothing suggests that these morons ever forget or forgive anything, except for everything wrong that the Orange Monster does.

In any case, seeing competitive beer ads during the SB show is actually novel because AB has had an exclusivity lock on these broadcasts for the last 30 years. In soft drinks, my guess is that most viewers won’t have a clue about this year’s intros—Cirkul, Liquid Death, and Poppi—either before or after they see the ads. No Coke, no Pepsi, and not much fizz. Mountain Dew had semi-singer Becky G serenaded by Seal who is probably free now from her Infinity ads since none of the main telecom players opted to run ads.

Why the Tech Bros Benched Themselves

Another surprise is the absence of big tech firms like Apple, Amazon, Microsoft and Snapchat. Steve Jobs used to say that advertising was the cost of being boring although his amazing 1984 hammer-tossing ad set the curve for many years to follow. Meta was there and a couple of website pipsqueaks like Go Daddy and Square Space, but it looks like the tech bros felt that their cash was better spent on Trump’s inauguration and buying seats at the table rather than on the Super Bowl fans.

The crypto crowd has also decided to stay out of the limelight and out of jail while they work their own magic in D.C. with all the new Trump department heads and security regulators. Don’t expect to see too many more fields and stadiums to be named Crypto.com or FTX Arena any time soon.

The only financial players on the scene — the big banks are missing — are fintech newcomers like Rocket Mortgage (which had a sweet ad and a crowd participation gimmick), Nerd Wallet and Homes.com. Performative advertising is basically their storefront, so it’s mandatory. Every company wants to make money, but none of them really wants to buy advertising, especially when it’s this pricey. Sometimes you have no choice. 

Most of the largest entertainment firms, such as Paramount, Sony, Warner Bros. Discovery and Universal (Comcast) also took a pass. Needless to say, these football fans aren’t exactly flocking to theatres to watch films. Disney, on the other hand, ran run-of-the-mill promo ads for shows on its network and some boring film trailers.

Food and Food Delivery Make the Big Plays

Loads of snack ads, chips and candy galore, and a super oldy but goody from Hellmann’s featuring Meg Ryan and Billy Crystal reprising their orgasm gag from a million years ago in When Harry Met Sally, which was so tired and drained of humor that everyone involved should be embarrassed. The payoff line “I’ll have what she’s having,” originally delivered by director Rob Reiner’s mother in the original film was handed off to Sydney Sweeney in some desperate attempt to update the schtick. Maybe 99 percent of the viewers who knew Billy and Meg had no clue who Sydney was; no doubt they missed Estelle Reiner’s deadpan delivery. Coffeemate had a great CG ad with a tongue going wild and Jays ad with a little girl planting her potato was touching.

Finally, in a reflection of our hurry-up sickness, the “food delivery” firms including Door Dash, Uber Eats, and Instacart were as much focused on assuring folks that they could get their grub in no time as on pitching the diversity and extent of the products being delivered. Demonstrating once again that “time is more important than money or taste” in today’s world. Taco Bell had Doja Cat trying to photobomb customers using its Live Más Drive-Thru Cam lane but doesn’t say a word about its tacos.

I’m interested in your reaction and I’d especially love to hear from those of you who mainly watch the show for the ads, but my overall impression is that this new generation of ad execs and ad makers has basically lost sight of the fact that the most effective ads have had aspirational content—not just product pitches.

Very few of the Super Bowl ads (except for the great Jeep ad with Harrison Ford) had anything at all to do with making the viewers feel good about themselves or feel positive about their future. Maybe we’re all just stuck in the Trump dumps.

 

HOWARD TULLMAN JOINS LISA DENT ON WGN RADIO TO DISCUSS INSURANCE FOR THE CALIFORNIA FIRES

 LISTEN TO THE SHOW HERE

LISTEN TO THE SHOW HERE

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

Insurers Were Right About California’s Wildfires 

Regulators in California made it difficult for insurers to raise rates despite increasing risks. So the insurers stopped writing policies, which is logical. But they’ll get blamed and shamed anyway. 

EXPERT OPINION BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS @HOWARDTULLMAN1

JAN 21, 2025

In the tragic, painful aftermath of the latest California fires, there are plenty of lessons to be learned and lots of blame to spread around. And spreading blame may be the one thing that all the local government officials are truly best at. We’re not even counting the clods in Washington D.C., like Speaker Mike Johnson, who are also foaming at the mouth to spread some slime and flex their “conservative” credentials through extortionate demands for funding conditions while the fires are still burning.

We can expect the typical months of conversations, criticisms and complaints and ultimately, after all the grandstanding and garbage slinging, no concrete actions or improvements.

Then-President Biden made an immediate and kind gesture of promising millions in aid to the victims, but he’s already out the door. This generous offer was reminiscent of the bankrupt guy who takes a cab to the courthouse and then invites the cabbie inside as his newest creditor.

Someone else is going to have to pay the piper and the crook now in charge hasn’t paid a creditor for decades. Hopefully, the federal government will eventually step up and meet at least a portion of the massive support costs, property losses, and rebuilding expenses.

Let’s Blame the Insurers

Certainly, the insurers who are still active in California will take a huge hit. But beyond that, there’s going to be an enormous funding gap, which will adversely impact hundreds of thousands of lives. Still, I’m sure that we’ll hear that the ultimate villains turn out to be the insurers and the insurance industry. They represent such attractive and low-hanging fruit, and it’s so easy to blame someone else for the problems.

The reality of the wildfires is that we’re seeing one of the worst cases in history of “what comes around goes around”.     

First, millions of California residents are (and have been) uninsured or underinsured for many years. To save some money, they made very bad bet that their property and lives would be spared from the annual California catastrophes. This time around they lost. Big. As Warren Buffett said: “Only when the tide goes out do you discover who’s been swimming naked.”  And contrary to the stupid suggestions of Senator Rand Paul (R-KY) in this case, the tide and, in fact the entire ocean, was no help. The only thing that sucked was him. As an aside, thousands of new businesses, especially startups, make exactly the same kind of mistaken short-term decisions and don’t protect their businesses or their investors with appropriate insurance.

Why the Regulators Deserve the Real Blame

Second, the reason that so many residents were under- or uninsured is because for several years major insurers like State Farm have been reducing or eliminating coverage in California. Why?  Because the insurance regulators have been unwilling to let them to raise rates despite the higher risks of recurring natural disasters. Unfortunately, from a timing standpoint, many existing homeowners’ policies from multiple insurers were not renewed at year end– right before the fires hit.

While California is a huge and generally attractive market for insurers, much like Florida, as the underwriting risks and claims losses grow, it’s reasonable to expect less or even zero coverage in these states. The math can no longer add up;  even extraordinary rate increases are unlikely to cover historic-sized losses. 

Third, the alleged fallback protection for residents in California is a state-backed fund, the FAIR plan, which provides last-resort insurance coverage for all comers. Which is why the number of FAIR policies has exploded over the last several years. This sounds like a form of protection except that FAIR is undoubtedly insolvent given the expected losses from the fires—which are  yet to even be fully contained.

In a marvel of circularity, FAIR is replenished when needed by taxing the insurers doing business in the state based on their relative size. While the timeframe for the insurers to re-fund the FAIR coffers is not clear to me, it’s another obvious reason why the major insurers continue to shrink their book of business. They face the prospect of essentially paying twice for enormous losses and not receiving any premiums to offset the second tier of taxes. None of these plans in any of the states subject to floods, fires or hurricanes is sustainable over time.

Don’t Think It Can’t Happen to You–Do an Insurance Checkup

And, while the West Coast and its weather and water problems may seem many miles away from your own business and day-to-day operations, insurance availability and pricing in all respects are areas of concern and exposure that are going to impact all of us. Now’s the time to at least start thinking about it, asking questions of your own advisors and vendors, and taking whatever steps you can to best position yourself and your company for the future.

Everyone’s circumstances are different, but in my experience working with hundreds of companies over many years as well as with all the major insurers, here are a few things to ask yourself.          

·         Who is helping you address these exposures and risks.

Remember that an insurance agent works for the insurer and not for you. Their objectives and incentives are quite different from yours. It’s not dissimilar from both parties to a divorce proceeding who are foolish enough to think that their attorneys are representing them when in fact the attorneys are only representing themselves. As noted above, the insurers fully understand the growing risks and are more than incentivized to exclude, omit or otherwise avoid liability in as many instances as they can.

·         Do you ever read the provisions and exceptions in your policies?

Be honest. Every time there’s a renewal, it’s accompanied by changes, updates and additional exceptions and limitations to coverage and you never even look at those pieces of paper. This is exactly like the “terms and conditions” which every tech vendor loads into their documents and asks you to consent to without any understanding.

·         Do you even understand the new kinds of damage to your business and livelihood that are out there today? Are you covered?

Business interruption insurance has more holes and outs and exceptions than the finest chunk of Swiss cheese. Cybercrimes including scams, identity thefts and ransom demands are skyrocketing. Are you covered? One new area here is litigation by your own clients and customers for injuries they have allegedly suffered through their own fault or negligence but nevertheless want to blame on you. It doesn’t generally cost any less in litigation if you happen to be found not culpable. How about coverage for area-wide power and grid outages?

Bottom line: You don’t want to be asking these questions and getting the wrong answers after the fact. The time to build your boat is before the flood. Take the time now to have someone take a look at your own company’s situation.

NEW INC. MAGAZINE COLUMN FROM HOWARD TULLMAN

 

How to Fire Your Customers

Not all of them. Just the ones you don't need. Recently, insurers State Farm and Allstate demonstrated how that's done by dumping longstanding clients in California. Love'em when they're profitable; leave'em when they're not.

BY HOWARD TULLMAN, GENERAL MANAGING PARTNER, G2T3V AND CHICAGO HIGH TECH INVESTORS@TULLMAN

Mark Twain said that a banker is a fellow who lends you his umbrella when the sun is shining but wants it back the minute it begins to rain. I'd say his view was a little narrow, since plenty of investors are certainly charter members of the same unreliable club. The overnight run on Silicon Valley Bank and that institution's ultimate collapse -- which most of us believe was driven by the panic of a few key, well-connected, and cowardly VCs with social media megaphones -- is just one of the latest cases in point. As my old friend and mentor Bill McGowan, the founder of MCI, used to say: These guys have great loyalty to their businesses, but their No. 1 loyalty is to their own tush. When the heat is on, they're hard to find and you'd be a fool to depend on them.

And the heat is on, literally, as well as the water, which is why State Farm and Allstate are abandoning the California market for homeowners’ insurance. You're apparently no longer in good hands and it's not exactly neighborly, but if you live in the land of wildfires, floods, and mudslides, you're really up a creek.

We've all experienced versions of the disappointment of fair-weather friends, in both our business and personal lives. They're there cheering you on in the good times but bail the moment that the going gets rough. They have wishbones where you thought they had backbones and they disappear without a trace when you really need them most. And then -- down the line and after the fact -- the ones who utterly lack the courage to contribute always seem to find an explanation to justify their cowardice. If you really want to do something, you'll find a way; if you don't, you'll find an excuse. 

This painful recurrence is part of every entrepreneur's journey. Where there's always an uphill part of the path, where promises that seemed so solid go up in smoke, and where sometimes you feel that you can't tell your courage from your desperation. They should print t-shirts saying something like: "count on self-interest, not self-sacrifice, and you'll never be surprised" along with the rest of each startup's swag. No one enjoys the process when friends and even family flee, and the pain and heartbreak don't get any better when you've been part of that particular movie too many times yourself.

But there are unavoidable times when the shoe is on the other foot - where you've got to disappoint people and leave them hanging. Then it's your job to break the hard news to some of your own customers that some changes are necessary and that it may even be time for you to part ways entirely. Especially these days, you're going to have to get ready to say "No" and it won't be easy. Not easy or simple, but simply necessary. The reality is that you're not required to burn down your own business just because you feel the need to be a good sport and try to be there for everyone else.

And, as the triage begins, you're going to need to carefully pick and choose which clients, customers, partners, and vendors you can stick with and help, and which are going to have to be "fired," because these choices will ultimately determine the course of your own firm. There are some basic rules in these cases that can help, but in the final analysis, the process is very often seat-of-the-pants. These discussions turn out to be far more emotional and confrontational than you would imagine and there's often a lot of sad and bitter talk about loyalty, values, and trust.

That's why it been very interesting to watch as both State Farm and Allstate have announced that after decades of doing business in California and making boatloads of bucks as the economy and the population there dramatically expanded, they've both decided (separately, I'm sure) to stop writing any new homeowners insurance policies in the state.

They have plenty of explanations and justifications - climate change and associated weather risks, higher repair and material costs, increasingly challenging regulations, overbuilt and insecure geographies -- but the real bottom line is that they have no loyalties, customer commitment, or empathy. They only have "interests" and for now at least they're no longer interested in insuring California homeowners. Love'em when the dollars are there and leave'em in the lurch when things go south. It may feel painfully personal to you, but it's just business to them. And don't think that because the big guys have moved on you can expect to see a herd of other insurers rushing in to fill the void. Quite the opposite: they'll get out of town just as quickly as they can. They have about as much courage as the last tackler jumping on the pile in a football game.

Commercial real estate is next. This has serious implications not simply for downtown skyscrapers, but also for strip malls and smaller buildings nationwide, which house many startups and SMBs. Borrowers, and especially smaller businesses that have taken loan renewals and rollovers absolutely for granted for years as they've been loyal and regularly paying customers, are about to get some very rude awakenings when their loans are pulled, accelerated, or not renewed. These situations are a lot like pouring too much cream in your coffee. Easy to do, hard to undo.

When the prime borrowers collapse and the banks grudgingly have to take over these properties, you can bet that basic tenant services, ongoing maintenance, and promotional support will all take a huge hit.  Needless to say, in the midst of all the crap we've gone through over the last three years, having to quickly repay a line of credit or retire some revolving debt (or having to quickly relocate from a mall or a building that's falling apart around you) couldn't come at a worst possible time especially when any spare funds you might have had were going to be critical to bridging any remaining revenue or inventory gaps as the economy started to grow again and customers returned.

And it's not like there are a bunch of other banks waiting in the wings to offer you some alternatives. If you sensed that draw requests, fundings, and paperwork processes were slowing down before, these days you're looking at a timeframe between forever and never. Even the biggest banks such as Chase are slowly and steadily (and somewhat stealthily) stepping away from their commercial real estate portfolios and hoping at the same time that they'll get out of most of their positions, even with a haircut, before the true deluge begins. The people running these operations may have virtues, but courage is not one of them. They may be smart, but they're scared as well. Staying the course and partnering with longtime clients and customers isn't the kind of risks that make sense today for middle managers who are frankly worrying about their own positions as well.

There are no easy answers, and the current financial climate is unlikely to improve for another year or so as the waves of cancelations, foreclosures, repossessions, and shutterings rise, crest, and hopefully start to subside by next fall. In the meantime, the smartest and safest things to do are fairly simply: conserve and save your cash, don't rely on renewals or new borrowing, hunker down and don't make any big financial bets at this point, and hope that the MAGAts in Congress don't make things much worse.

1871 Welcomes CORPORATE PARTNERS, MEMBER COMPANIES AND SPONSORS FOR INNOVATION AND BEST PRACTICES SESSIONS

1871 CEO HOWARD TULLMAN KICKS OFF STATE FARM EMERGING TRENDS WORKSHOP 2015

  

1871 CEO HOWARD TULLMAN SPEAKS ON SOCIAL MEDIA, TECH, INNOVATION AND WORKING WITH STARTUPS FOR STATE FARM INNOVATION DAY