What’s the best way to understand the economy? I guess you could ask around about it. Hey, you might say to a stranger, do you have a job? All right, and your weekly income? Thanks, and how much did you last pay for eggs? You could also read government reports on employment and prices, but they’re long and complicated, and they have broad error margins.
So maybe just watch the Super Bowl.
Advertising might be the art of fibbing responsibly, but marketing budgets can’t help but be honest: You either spend $7 million on a 30-second spot or you don’t. That’s why the biggest day in American sports, which is also the biggest day in American ads, is a useful measure of which firms and sectors believe themselves to be the future of the economy—and why it’s an excellent barometer for bubbles.
In 2000, 14 young “dot-com” companies bought ad time in the Super Bowl, including Pets.com, OnMoney.com, E-Stamps.com, Epidemic.com, HotJobs.com, and e1040.com. The next year, the dot-com bubble had popped, and the software industry slashed its advertising budget below the threshold of Super Bowl spots. Two decades later, almost all of the above start-ups are dead.
Last year, a cluster of crypto companies—including FTX, Coinbase, Crypto.com, and eToro—ran ads during the big game. The surge of blockchain-related spots inspired some people to call it the Crypto Bowl. But since then, crypto-asset values have crashed. Several crypto firms have gone bankrupt. And FTX, the brainchild of the disgraced crypto maven Sam Bankman-Fried, is a dumpster fire. And what do you know, the industry has “zero representation” at this year’s Super Bowl.
In general, the ad roster seems to be snapping back to the pre-COVID status quo. Anheuser-Busch leads all firms with three minutes of airtime. Other alcohol brands such as Heineken and Diageo are in. So are M&M’s and Doritos and movie studios and automakers. This year’s Super Bowl is going to feel a lot like 2019 or 2020—except with a shiny fleet of new electric vehicles.
This sharp pendulum swing to crypto and back to junk food is clearly reminiscent of the dot-com boom and bust. But it’s also reflective of what I’ve called the yo-yo nature of the pandemic economy.
The clampdown on the physical world in 2020 funneled economic activity online. Restaurants closed, and streaming accounts opened. Investors poured into speculative tech such as crypto, believing that we were accelerating into a berserk digitized future. When the pandemic receded and the economy recovered, inflation spiked, rates increased, and risky start-ups and growth stocks that thrived in a low-rate environment crashed. It’s the revenge of the touch-grass economy.
The crypto yo-yo is just one of many vertiginous ups and downs that the U.S. economy has gone through in the past few years. Gas prices went up and down; shipping costs went up and down; the price growth of durable goods (think: furniture, jewelry) went up and down; savings rates, housing investment, and tech employment went up and down.
I’m anxious about saying something as simplistic as “the U.S. economy is just a long line of price bubbles,” but that’s true enough. The crypto bubble reflected in last year’s Super Bowl really is a microcosm of the U.S. economy.
And yet. Some bubbles enjoy life after death. The dot-com companies that perished in the early 2000s fertilized the software boom that changed the world in the 2010s. Although the 2023 Super Bowl clearly represents a return to the old normal, we might look back two decades from now and see that, just as the death of Pets.com augured the rise of online shopping, the bursting of the crypto bubbles presaged the rise of a new weird kind of digital economy. I guess we have no choice but to keep watching.
