Cashing in on confessions: The Lance interview

Today and tomorrow, the Oprah Winfrey Network will broadcast Oprah's interview with Lance Armstrong. The much hyped and anticipated interview will generate a massive amount of viewers, not only in the US but also worldwide.What an advertising opportunity.
The reach of the interview will surely surpass the reach of the big yearly advertising show called the Super Bowl. On the other hand, Oprah's interview will not result in a useful reach for every advertiser. Not every brand is known worldwide or uses the same brand name, logo and positioning strategy in each country. Another downside is that in contrast to the Super Bowl, advertisers had little time to plan their ads since Oprah did not announce it months before. Still, it seems as if most ad spots have been sold at premium prices (see e.g. Huffington Post).

A journalist asked me to estimate the total ad revenue of this two-part interview. Here is my conservative estimate:
- The inverview will total more than two hours (There is a 1.5 hour show today and another one tomorrow that will at least take 1 hour I guess). Oprah said she did not want to cut the material to a one hour interview because it was too rich (pun added and intended...)
- Assume, conservatively, that there will be 15 minutes of ads per hour, which equals 30 ads in the typical 30 second format.
- Now for the biggest assumption: how much does one ad cost? Super Bowl ads go for about $ 3million each. The most expensive ads in a regular US show are those for Sunday Night Football at an estimated $545,142 (source Adage.com). Given the problems mentioned earlier (short notice to produce targeted ads; possibly not a useful reach worldwide), OWN will not be able to charge at Super Bowl prices. On the other hand, OWN would be stupid to sell at the mere price of sports program (no personal depreciation on my part but the Lance confessions have a much broader audience). If we conservatively assume $750,000 as the minimum price for an ad in Oprah's Next Chapter interview of Lance (probably a serious underestimation)...

... than the total ad revenue should be at least 2,5 x 30 x $.75 million = ~ $56 million.

That is not bad for a network that reports $329 million as their quarterly ad income one year ago (source). And of course, the interview will also generate other income due to it being sold to other stations worldwide. And, in the mid to long term, OWN surely hopes the interview will generate some more audience for other content of the network thus increasing their ad revenue in the long run as well.

I'll be curious to learn about the real revenue if it will be disclosed.

[Note: Edited for a stupid miscalculation]

Consumers’ expected quality of high discount daily deal services

Below is a guest post by Sanne Meussen, who studied consumer responses to daily deal websites in her master's thesis (which I supervised). Apart from the to-be-expected preference for higher discounts on such websites, she also found some evidence that there is a hidden danger to these high discounts...

Even though Groupon has lost $10 billion of its market value in less than one year, the number of subscribers is still growing. Apparently, consumers are still interested in high discount deals on daily deal websites. Why wouldn’t they, if they can eat a first-class meal at a local restaurant with a 75% discount? Groupon even points out: ‘we want each Groupon purchase to feel too good to be true’.

Where's the revenue in Google Glasses?

The Google Glasses preview seems great. It seems feasible, releases are expected pretty soon and there is some intuitive appeal to the idea (and some intuitive questions as well). If you have not seen the preview, you should.

A number of parodies, of course, already exist and one is remarkably interesting and touches upon important marketing and revenue issues.