Mercedes is of course known for their quality engineering. So, their engineers are quite familiar with the phenomenon called "head tracking." Another name for it is "dead reckoning." You can read about it here (link has a chicken video).
Athletes try to do this while hitting a baseball, tennis ball, golf ball, etc. How many times have heard a coach or trainer say "keep your head still."
For you kids, the song — which is perfect for the ad — is "Upside Down" by Diana Ross.
The concept has been used before in advertising. See the below Fuji spot. This is not a big deal, it's not like it was a new physics concept. Plus the Mercedes spot is much better.
Mercedes' German ad agency is Jung von Matt, and their American agency is Merkley & Partners. I'm unsure who's responsible for this gem. If you know, comment. UPDATE: It's by Jung von Matt.
Postscript: Pointless PETA protest to come...