CBS tells SodaStream to change Super Bowl ad

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.”
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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 beverages 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.
 

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