Analyzing Audi's Controversial Super Bowl Commercial
If you haven’t seen Audi’s #DriveProgress Big Game Commercial – “Daughter” from the super bowl check it out (click the image above). It gets into the hearts and minds of anyone who watches it.
Regardless if it warms your heart or angers it, you’re sure to have some reaction. If it helps you see a brighter future for the young women of the world or it frustrates you, it’s likely started some thoughts and maybe even some discussions.
The early viewer feedback wasn’t positive. Some YouTube viewers calling the wage gap between men a “myth” and others looking at the overall theme as negative. Some commenters even called this commercial “feminist propaganda”.
Viewers of the commercial also jumped to action on Twitter to point out that Audi’s board of directors is full of men and that the US equal pay act was passed in 1963.
Whether you agree with the commercial or not, the question we’re asking is why?
Why did Audi choose to produce this commercial and pay millions of dollars to run it during the Super Bowl? What were the intentions behind this controversial commercial? Audi could have kept it simple, followed the “norm” producing a typical “our car is the best” commercial as they have in the past. They made a choice, a decision they knew would be a controversial one. Based on the social media comments and media feedback we’ve looked at six possible intentions behind Audi producing this commercial.
The definition of propaganda found on Wikipedia refers to several key characteristics. These areas include biased or misleading nature, used to promote a political cause or point of view, is used primarily to influence an audience and further an agenda, often by presenting facts selectively. Unarguably the commercial is biased towards women’s pay equality. It could be argued that it does promote a political cause. The true “guts” of a propaganda message is around misleading presenting facts selectively. Was Audis’ goal to mislead its viewers? Considering that there is no data presented, no stats or measurements within the commercial it does not mislead with selective facts. Was Audi misleading their audience into believing they are committed to equal pay when they are not? What win could this commercial have if that was their intention? It’s obvious this would stir up discussion inside and outside the company. Equal pay is subjective. Without total performance and pay transparency employees will be in the dark, or at least the shadows, when comparing their pay to others. No doubt there were several employees that approached their manager, HR or someone else in the organization after this commercial was launched online. Requests for raises, discussions or evaluations of pay. The idea that Audi wants to mislead the public about their commitment to this has no legs. Publishing this type of commercial no doubt created additional work for those managers, HR representatives and others within the organization. From this perspective, it wasn’t in Audi’s best interest. Unless, they wanted more women within their company to speak up, ask questions about pay equality and challenge it. If this was their intention would it be so bad?
What if Audi’s reasons for producing this commercial were political? As a way of “lobbying” for equal pay across the US. As a friendly Twitter user pointed out, the equal pay act in the US was passed in 1963, thus voiding a portion of the political argument. Could Audi want improved oversight, regulation and enforcement from the government? It’s possible, if they are already committed to equal pay, this would be welcomed. Creating parity across automotive companies with regards to equal pay implementation would be a negative for Audi. They wouldn’t have the competitive advantage. As well, an increased focus on enforcing equal pay would cost Audi with implementing changes. It’s reasonable to assume that this was not Audi’s intention.
Sell More Cars to Women
The purpose of advertising is to sell a product or service. It’s logical and reasonable to assume that this heartfelt, emotionally charged and controversial ad, was created to simply sell more cars. Focusing on women as a target market is not new for Audi. Last year, they ran a commercial that focused on gender equality with children’s toys and women driving. With a slogan “Playing, just like driving, shouldn’t be a matter of gender”. Audi has their sights on Women as a target market currently. It shouldn’t be surprising if a car companies’ intention to create a new commercial was simply to sell more cars.
Hold Themselves Accountable
We’ve all heard of various forms of public accountability. Many people post their weight loss goals and workout routine on social media to hold themselves accountable. Others find an accountability buddy to hold their feet to the fire. A public statement like “Audi of America is committed to equal pay for equal work” is one that holds them accountable. If their intention was to hold themselves accountable, I’d say they have achieved their goal.
Bring Light to Pay Equality
What would be so bad if Audi intention was to shed light on pay equality? Nothing, unless there isn’t a problem. If there is not an equal pay problem, we end up back to the concept that this commercial was propaganda. Is there an equal pay issue? Last year I wrote about women equality from the opposite point of view of my personal opinion (you can read this here). What this helped me to understand is that we can frame data in a way that supports either position. We can drop data that we don’t agree with, while still staying truthful and highlight data towards our opinion. Despite a desperate attempt to disprove the inequality of women in the workforce, I couldn’t. Through the numerous research studies that I could locate, they all pointed to one truth; women are not treated equally in the workplace. If you don’t believe me, check out McKinsey & Company’s Women in the Workplace study. If we conclude this research is accurate, once again we move out of the propaganda territory. If Audi’s sole purpose for producing this commercial was to promote pay equality for women, whether you believe it’s true or not, is this bad? If they produced a commercial that stated “Audi of America is committed to children living a happy life” we wouldn’t be questioning it. If you believed that all children are happy already, would this type of commercial be frowned on?
Enroll Intelligent, Driven Women into Their Brand
When I first watched the commercial, my head went directly to recruiting. In our ConvertiHire training program, we encourage leaders to enroll candidates. Enroll candidates into the mission and vision of their business. Audi’s intention could be to enroll smart and driven women into their organization. A megaphone if you will, to let women know that Audi shares a value that many of them may also value. If this is Audi’s intention, what a great one.
Regardless of what you believe Audi’s intention was, I hope that you see this as an opportunity for discussion within your home and the company that you work for. Any company that discusses equality in the workplace and any organization that has this as a priority is on the right track to create a work environment that benefits everyone.
Understanding ETF Liquidity and Trading
Written by: ProShares
ETFs offer attractive features—access to a broad range of asset classes, sectors and styles in a liquid, transparent and cost-effective vehicle. But before using that vehicle, it’s helpful to understand how it works, especially the sources of ETF liquidity and the mechanics of trading them. Understanding these points may help you improve execution when buying and selling ETFs.
The Primary Market—Creation/Redemption of ETF Shares
Most investors trade ETFs on stock exchanges in the secondary market. But the actual creation and redemption of ETF shares occur in the primary market, between the ETF and authorized participants (APs)1—the only parties who transact directly with the ETF. The APs’ ability to continuously create and redeem shares allows them to meet the supply and demand needs of investors, making them key liquidity providers in the secondary market.
Creation. This is how APs introduce new ETF shares to the secondary market.
- In-kind—The AP creates ETF shares in large increments—known as creation units—by acquiring the securities that make up the benchmark the fund tracks in their appropriate weightings and amounts to reach creation unit size (blocks ranging from 25,000 to 100,000 fund shares). The AP then delivers those securities to the ETF in exchange for ETF shares.
- Cash—Alternatively, APs can create ETF shares by exchanging the appropriate amount of cash for ETF shares, for what’s known as a cash create. Often, ETF shares are created using a combination of securities and cash.
- The AP then offers the ETF shares for sale in the secondary market, where they are traded between buyers and sellers on an exchange.
Redemption. This follows the same process in reverse.
- The AP redeems ETF shares in large increments—known as redemption units—by acquiring them in the secondary market and transferring them to the ETF in exchange for the underlying securities or cash (or both) in the appropriate weightings and amounts.
The Secondary Market—Costs and Mechanics of Trading ETF Shares
Costs of Trading. In the secondary market, firms that specialize in buying and selling ETF shares—APs or market makers2 (liquidity providers)—trade them to provide market liquidity and make a profit. This profit margin is embedded in the bid/ask spread, which reflects the implicit costs of trading ETFs.
Bid/ask spread is the difference between the bid—the highest price at which a buyer is willing to buy shares—and the ask—the lowest price at which a seller is willing to sell ETF shares. Three key factors impact the bid/ask spread:
- Creation/redemption fees charged by the ETF provider to the AP.
- Spread of the underlying securities—The bid/ask spread and liquidity of the securities that make up the ETF affect the liquidity and the bid/ask spread of the ETF itself. When there are many bids and offers on a security, it is easy to buy and sell, thus the bid/ask spread tends to be tight. When securities are less liquid, the spread is wider, making the cost to acquire them higher. The higher the cost of acquiring the underlying securities, the wider the ETF bid/ask spread.
- Risk or hedging costs—Holding ETFs entails certain risks, which need to be hedged. Liquidity providers use a variety of financial instruments, including futures, options and other ETFs, to hedge this risk. The more instruments they have to choose from, the lower their hedging costs and the lower the bid/ask spread. The higher the risk, the wider the spread.
ETF bid/ask spread = Creation/redemption fees + spread of underlying securities + risk
Executing Large Orders—Tapping Into Deeper Pools of Liquidity
There are two common ways to execute larger trades directly with liquidity providers, both allowing investors to access deeper pools of liquidity than those offered in the quoted secondary market alone:
- Risk trade—A liquidity provider will quote a price for an ETF at a given size. If that price is accepted, the trade is executed and the liquidity provider assumes the market risk of providing the liquidity at execution.
- Create/redeem—For orders that are large enough, it may make sense to work with an AP to create or redeem shares. This type of transaction is usually executed at either the closing market price of the ETF or at the NAV of the ETF plus fees or commissions.
Mechanics of Trading. To fully consider an ETF’s total costs, it is important to understand the dynamics of trading. In general, two types of orders are commonly used to trade ETF shares:
- Limit order—Buy or sell ETF shares at a specified price. One way investors decide at what price to enter a limit order is to look at the IOPV3 as a guidepost. Limit orders may help investors get the best price, but there’s a risk the order will not be filled.
- Market order—Buy or sell immediately at the prevailing price available at the time. With market orders, execution may be faster, but the investor has limited control over the execution price.
While a large number of transactions are executed using limit or market orders, investors often find their order is larger than the quoted market. There may be “hidden” liquidity within the quote that can be accessed in the market using limit or market orders. However, in some cases, it may make sense to execute trades directly through a liquidity provider. How and when to place an ETF order can depend on many factors, including price sensitivity, level of urgency and overall goals for the portfolio. Determining what factors matter most can help determine the best execution strategy.
Questions? Our capital markets experts can help. Learn more about our ETFs here.
1 An AP is a U.S. registered, self-clearing broker/dealer who signs an agreement with an ETF provider or distributor to become an authorized participant of a fund.
2 A market maker is a broker/dealer that buys and sells securities (or ETFs) from its own inventory to facilitate trading in those securities. Most APs are market makers, but not all market makers are APs.
3 IOPV is the Indicative Optimized Portfolio Value—the intraday net asset value of the basket of underlying securities
Investing involves risk, including the possible loss of principal. ProShares are non-diversified and each entails certain risks, which may include risk associated with the use of derivatives (swap agreements, futures contracts and similar instruments), imperfect benchmark correlation, leverage and market price variance, all of which can increase volatility and decrease performance. Please see their summary and full prospectuses for a more complete description of risks. Carefully consider the investment objectives, risks, charges and expenses before investing. This and other information can be found in the prospectus; read carefully before investing; obtain at ProShares.com. There is no guarantee any ProShares ETF will achieve its investment objective.
- 1 of 986