The Economics of Martha Stewart Living

BusinessWeek recently reported on the creative product-placement deals that daytime TV shows employ. The highlight of the article is Martha Stewart — the self-described “most trusted guide to stylish living” — discussing with pure candor her capitalizing ways: “I like to inform people about good things.”

Stewart’s syndicated NBC show, which airs daily at 4 PM, is currently lagging in the ratings and can only charge advertisers about $10,000 for a 30-second spot, as opposed to $18,000 for The View or a staggering $100,000 for Oprah. But if an advertiser spends at least $250,000 total on ads during a season, the money also buys a special “branded segment” on the show, along with mentions in Stewart’s magazine and radio broadcast.

It seems the idea is working: airtime for Martha Stewart Living is sold out through the 2007-08 season. Latecomers or advertisers who don’t want to invest the full $250,000 can also buy a “one-time in-show oral mention with product close-up,” as BusinessWeek calls it, for $100,000, while a two-minute segment that “works in an advertiser’s talking points” starts at $250,000.

It would be interesting to see what Stewart’s fans think of the system. Do they enjoy her product “suggestions” and appreciate her candor? Or might the product placements have something to do with her lag in the ratings?

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  1. ImFromGuam says:

    I love Martha Stewart! But then again I think duct tape is a lovely interior decorum neccesity.

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  2. ImFromGuam says:

    I love Martha Stewart! But then again I think duct tape is a lovely interior decorum neccesity.

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  3. rich_canada says:

    lintman, I don’t see it as all that sleazy. She’s simply trading the imaginary value of the brand she built up by giving good advice for real money. In time people will realize that she’s just a name used to promote products and she and NBC will have a lot more money.

    At that point the transaction will be complete. People may still feel slightly better looking at a package that says “Martha Stewart”, but the conscious knowledge that her advice is good will have been sold piece by piece.

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  4. rich_canada says:

    lintman, I don’t see it as all that sleazy. She’s simply trading the imaginary value of the brand she built up by giving good advice for real money. In time people will realize that she’s just a name used to promote products and she and NBC will have a lot more money.

    At that point the transaction will be complete. People may still feel slightly better looking at a package that says “Martha Stewart”, but the conscious knowledge that her advice is good will have been sold piece by piece.

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  5. sjk says:

    Bear in mind that she has never disguised the nature of her activities.

    She may not disguise the nature of her activities, but neither does she openly state when there is a paid advertisement.

    BTW, David Letterman isn’t that terribly adverse to advertising. He does give away meat from Loebels and coupons to local restaurants. If you don’t think those are paid product placements, then you are mistaken. It may seem less immediately offensive than Martha’s product placements because there is a long tradition of game-show prizes being subsidized for the advertising value.

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  6. sjk says:

    Bear in mind that she has never disguised the nature of her activities.

    She may not disguise the nature of her activities, but neither does she openly state when there is a paid advertisement.

    BTW, David Letterman isn’t that terribly adverse to advertising. He does give away meat from Loebels and coupons to local restaurants. If you don’t think those are paid product placements, then you are mistaken. It may seem less immediately offensive than Martha’s product placements because there is a long tradition of game-show prizes being subsidized for the advertising value.

    Thumb up 0 Thumb down 0