Brangelina Baby Photos – A Business Case
Posted on August 26, 2008 - Filed Under Random
I don’t pay as much attention to celebrity gossip as I should. Seeing as this stuff is more addictive than crack to the majority of the developed world, I should be more plugged in. On the weekend, I was reading this article on Ad Age. It gave the staggering figure that People and Hello! Magazine split a cost of $14 million for photos of the twin spawn of Brangelina.
But it got me thinking. What’s the value to People Magazine? Let’s assume that they split the $14 million cost evenly with Hello! Magazine. So their incremental cost for the photos is $7 million.
Brangelina with a couple of their nest eggs. Value? About $12 million.
Their revenue? An estimated 2.6 million newsstand copies of People were sold at a price of $4.49. Gross revenue from newsstand sales is $11.6 million. Additionally, they received 6 million unique visitors on People.com in the first 24 hours of publishing those photos. At a media cost of $200,000 per million unique web visitors, that’s an additional$1.2 million in online ad revenue. If we estimate normal in-magazine advertising revenues to be (conservatively) $8 million, total revenues are $20.8 million! For one issue!
Verdict? As astounding as it seems, it was the correct business decision to shell out millions of dollars for baby photos. Needless to say, making babies is a profitable business.
- Christian
PS. In future blockbuster celebrity births, perhaps People and other celebrity magazines can find a way to let their advertisers know so that they can customize their ads to the news.
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