CBS tells Israeli Company to Change Super Bowl Ad

Super Bowl Ad Shines Light on Israeli Company Tactics


SodaStream is the first Israeli company to run an ad in the Super Bowl

Ad Age has reported that CBS had rejected the Super Bowl spot for SodaStream (SodaStream International Ltd. (Nasdaq: SODA).

SodaStream is the first Israeli company to run an ad in the Super Bowl. The home soda-making machines manufacturer is in the midst of a global campaign in which it emphasizes its advantages over the bottled beverages industry and is challenging American companies Coca-Cola and Pepsi to take their market share.

Ad Age also has reported that SodaStream has already run afoul of authorities in the UK indicating its product is more environmentally friendly than established sodas; the spot shows branded bottles and cans of soft drinks exploding into thin air.

For the Super Bowl, it hoped to up the ante with a spot depicting truck drivers clad in clothing with Coca-Cola and Pepsi marks on them, according to SodaStream’s chief marketing officer.”

Ad Age said, “The content of its planned commercial seemed to have concerned CBS because it was a direct hit at two other Super Bowl sponsors and heavy network TV advertisers: Coke and Pepsi.

Ad Age quotes SodaStream chief marketing officer Ilan Nacasch as saying, “We really tried to comply with the standards” set by CBS, adding, “We were taking it to a new level, and that’s the level where they apparently judged to be going too far.”

He said that a new version of the ad CBS rejected was being prepared to appear on TV in the coming days – likely before the Super Bowl airs on February 3.

Ad Age says that SodaStream denies that the story was a PR gambit, and a CBS spokeswoman said network executives declined to comment.

According to Bloomberg Media, SodaStream International Ltd. (SODA) is poised for its biggest gain in seven months as the Israeli maker of home soda machines seeks to expand sales in the U.S. by airing its first Super Bowl commercial.

Shares have posted a 13 percent gain this month after dropping 0.3 percent to $50.53 in New York yesterday. The Bloomberg Israel-US Equity Index (ISRA25BN) of the largest New York traded Israeli companies fell to the lowest in two months, following the benchmark TA-25 Index’s 0.8 percent retreat yesterday amid reports of an Israeli attack near Syria’s border with Lebanon. Gazit-Globe Ltd. (GLOB) dropped the most in three weeks.

SodaStream is looking to boost its market share in the Americas, which accounted for 33 percent by Sept. 30.

The maker of do-it-yourself soft-drink machines, which has targeted the bottled beverage industry through its marketing campaigns, spent about $40 million last year on U.S. advertising and promotions, according to Monness Crespi Hardt & Co. SodaStream will join companies that pay CBS Corp. (CBS) an average of $3.75 million for a 30-second spot on the Super Bowl, research company WPP Group’s Kantar Media said.

“The Super Bowl ad should give retailers a reason to stock up on SodaStream makers in February, which is generally a slow month,” Jim Chartier, an analyst at Monness Crespi Hardt who rates the shares a buy, said by phone from New York yesterday. “A $4 million commitment for the Super Bowl might sound like a lot, but they’re coming off a very successful TV campaign in the fall and this is an opportunity to build on that.”

Border Attack

SodaStream, based in Airport City, Israel, has sought to attract customers by arguing that buying packaged drinks clogs up landfills and is bad for the environment. SodaStream Chief Executive Office Daniel Birnbaum said in November that the company expected to spend about 16 percent of sales, or an estimated $72.4 million, on advertising and promotions in 2012.

The Super Bowl, the pro football championship game that will take place in New Orleans on Feb. 3, is the most-watched television event in the country, drawing more than 111 million U.S. viewers. CBS rejected an initial commercial from SodaStream which contrasted its products with trucks filled with soda bottles from Coca-Cola Co. (KO) and PepsiCo Inc. (PEP) The two largest beverage makers also purchased commercials during the game.

Banned Commercial

The company’s spot during the Super Bowl will be similar to its “Set the Bubbles Free” commercial that ran in the U.S. during the holiday season, Yonah Lloyd, the company’s executive director of corporate development, wrote in an e-mailed statement on Jan. 29.

The ad, which has received more than 2.5 million hits on Google Inc. (GOOG)’s YouTube, was rejected by a U.K. regulator in November after a ruling that the advertisement which shows crates of bottled beverages spontaneously exploding “denigrated other soft drinks.”

SodaStream will probably say on Feb. 28 that sales rose 37 percent last year to $425 million, according to the mean estimate of eight analysts surveyed by Bloomberg. The company last year expanded into U.S. retail outlets including Wal-Mart Stores Inc. (WMT) The U.S. represents more than 90 percent of SodaStream’s Americas sales, which also include Canada and Brazil, Lloyd said.