Celebenomics: Is Oprah Worth Australia's $2.8 Million? Heck, Yes!
By Jo Piazza Posted Sep 15th 2010 04:00PM
Oprah Winfrey's grand excursion down under is reportedly costing Australia's tourism board nearly $3 million in Australian dollars. (Approximately $2.8 million U.S. dollars.)
The Queen of Talk surprised her studio audience on the premiere episode of her 25th season by giving her 300 guests a trip to Australia. Winfrey and her guests will be in the country for eight days and seven nights, where she will tape at least two episodes of her show, including one at the Sydney Opera House on Dec. 14.
"Oprah is a household name and her star power has the potential to lift Australia's profile as a premier tourist destination," Tourism Minister Martin Ferguson said in a statement on Tuesday.
Former federal tourism minister John Brown played down the media's criticism of the costs.
"We spent hundreds of millions of dollars over 30 years without much effect, I must say that honestly," Brown told a news conference. "The publicity that Oprah will bring to Australia around the world is something you couldn't buy."
This new strategy is part of the Australian government's shift to integrated marketing to attract tourism dollars. "Traditional advertising and especially television advertising has lost some of its power to cut through and influence consumer behavior. The cost of television advertising means that Tourism Australia's spend in this medium is limited," the Ministry explained in its 2010 corporate mission statement.
The $3 million spent by the Australian government is essentially an integrated ad buy for at least two whole episodes that will reach 40 million Americans and be screened in 145 countries.
Ad rates vary, but it could cost up to $1,500 for a 30-second commercial to air during Oprah's show. Since each episode averages 60 commercials, then this is the equivalent of a $360,000 ad buy for the board. Adding in all of the Australia-related plugs that will appear in preceding episodes as well as in commercials for the 'Oprah' show -- not to mention plans the media guru may have to run stories on Australia in O mag -- the overall worth of the ad buy could be as high as $1 million.
But Oprah isn't just any kind of advertising. Better known as "the Oprah effect," it is difficult to put an actual figure on, but is more easily explained as simply, really f ***ing major. For the tourism board, this is an ad buy that comes with Oprah's endorsement, Oprah's affection and Oprah herself screaming from the rooftops that Australia is the best place ever to spend your tourism dollars.
And that has worked miracles before.
Cases in point:
The natural beauty products line Carol's Daughter, which was featured on Oprah's show in 2002. That episode provided the tipping point for the company -- one that was, at the time, a single storefront -- to become a multinational brand.
In 2003, Lori Karmel bought a floundering mail-order business that later became We Take the Cake. The company was saved from the brink of bankruptcy after becoming one of 'Oprah's Favorite Things.'
LAFCO pitched their European bath and body products to 'Oprah's Favorite Things' show for seven years. After being featured on the show 2007, sales spiked to more than a million dollars in 30 days.
After being featured on an O magazine "list" in March 2006, the portable diaper changing company Skip Hop more than doubled it's revenues.
MarieBelle hot chocolate was also featured on a 'Favorite Things' show and in the magazine in 2002, and the company saw its revenues multiply from $1 million to $5 million over four years.
It works for beauty products, diaper changers and hot chocolate, so why can't it work for a country?
There is very little gamble here for the Australian government, pegging your product -- in this case tourism -- to Oprah's brand is a no-brainer and media cynics are crazy for mocking the tourism board for spending marketing dollars to buy the Oprah Effect.
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