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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?