RadioShack's Super Bowl ad, featuring a number of 1980s superstars like Alf, Hulk Hogan, and Cliff Clavin dismantling a RadioShack store, was based on the joke the Radio Shack are outdated relics that should be torn down. That now seems like a terrible choice of ad for a retailer that the Wall Street Journal just reported will shutter 500 of its retail locations.
According to the Star-Telegram, the commercial was RadioShack's first Super Bowl spot in ten years. The ad was very well received, and was likely responsible for a seven percent spike in the company's stock the following morning. (The company's stock fell again on Tuesday, following the WSJ's report.)
As the blog 247wallstreet.com notes, the one-minute ad was not only incredibly costly — the company likely shelled out close to $8 million just for the one 60-second long spot — but offers an overly ambitious promise to investors and customers alike. The blog, which took into account possible store closures (the company has reportedly said in the past that it might shutter stores, but with the implication that the total number of locations wouldn't shrink) broke down the cost of a company-wide makeover, per the ad's promise of a new RadioShack:
If RadioShack had 4,300 company-operated stores in America alone, what is a fair cost of fulfilling the new image of that commercial? Assuming RadioShack closes down another 300 of its stores to a raw 4,000, how does one calculate the cost per store on a capital spending basis?... $100,000 per store may be close, maybe, and that is $400 million.
The renovations would eat up roughly one-half of RadioShack's liquid funds.
Another problem for RadioShack is is that every statement made by executives about the ad that seemed cheeky and fun now seems kind of cruel. The company's Chief Marketing Officer Jennifer Warren said “This ad is meant to grab attention, make viewers laugh, and let people know, it’s out with the old and in with the new RadioShack.” Which is kind of a slap in the face for people working in the "out with the old" locations that will be shut down.
And the ad, below, takes on a totally different connotation when you know that the retailer will shut down one-tenth of its stores.
We're not sure why RadioShack opted to spend $8 million on an ad that becomes sadly ironic within a week of launch, especially when it could have thrown out some drunk-seeming tweets and generated as much of a buzz.