April 18, 2024

Economix: Snookinomics

DESCRIPTIONJoe Coomber/Sipa Press Nicole (Snooki) Polizzi can generate big money for clubs.

In Sunday’s Styles section I had a piece on the untapped intellectual universe of Snookinomics: a back-of-the-envelope calculation for why Nicole Polizzi who is known as Snooki can charge $25,000 to drink for a few hours at a nightclub — or, more controversially, $32,000 to talk at Rutgers, more than that university is paying the Nobel laureate Toni Morrison.

So how could Snooki be “worth” more than a Nobel Prize-winner?

The discrepancy has nothing to do with their respective “intrinsic” values to society, however you might quantify those. Rather, it’s all about market forces. There is high demand for Snooki, and other reality-TV celebrities, because the venues that host her find that she provides a very handsome return on their investment.

By my back-of-the-envelope calculation, Snooki can bring revenue that is tenfold her appearance fee, at least for the spring break party last month at the club LAX in Las Vegas, which I used as a case study.

After all, with Snooki on tap, clubs can expect bigger volume, more drinking and higher rollers. But the biggest payoff comes from the publicity associated with an event with a household name.

If your club hosts Ms. Polizzi or Kim Kardashian or Britney Spears, you can almost be assured coverage in at least one of the sublimely popular celebrity tabloids. To that end you’ll also probably require your celebrity guest to sign a “non-compete” agreement, which says she can’t party at any competing clubs while she’s in town. This is pretty standard practice, so that you can capture all the publicity associated with her appearance — and thereby assure future traffic.

“If we don’t book a celebrity now because we think it’s too expensive, then we know we won’t be in any of the magazines, and we won’t be on TV, and that hurts our revenue next month,” said Alex Cordova, who is the vice president for marketing for Angel Management Group, which owns and manages some of the hottest clubs in Las Vegas, including LAX. “It’s a business like any other, and you need to make a good investment that pays off,” he said.

In the case of Rutgers, the international coverage the Snooki event received — even if not all positive — raised the university’s visibility.

I asked Cision, a company that tracks media coverage, to estimate the dollar value of all the various mentions of Snooki’s appearance at Rutgers. Jay Krall, the company’s business development manager, sent me the following calculation, based roughly on what all those press shout-outs would cost if bought as advertising:

Plenty of voices in both news media and social media have been calling for the university to spend its money in more substantive ways than attracting less-than-cerebral celebrities. But that’s not the whole story, much of this exposure puts the Rutgers name in front of new eyeballs, and not always in a bad light. On blogs specifically, I found that the coverage was 75 percent neutral, 10 percent positive and 15 percent negative in tone toward the event (this is programmatic sentiment analysis so there is some margin for error, missed sarcasm, etc.). This breakdown is fairly typical, most mentions of any news story are simple pass-alongs, though often presented with a silent smirk that’s hard to quantify, with no opinion expressed outright. The exposure from those neutral mentions contributes a considerable amount of publicity value to the event despite the negative coverage. Still, I’m discounting substantially for potshot mentions in my valuation here…

Mainstream media

14 mentions in daily newspapers, including the Toronto Star and Los Angeles Times. Also 1,161 mentions on News Web sites, 297 mentions on broadcast television including Conan and Chelsea Lately.

Mainstream news publicity value: $174,806

Blogs Twitter

7,180 people commented on, linked to, Liked, bookmarked or voted for 2,098 blog posts

Blog publicity value: $136,017

15,169 tweets (including one very widely retweeted one from @time) received by a total of 26.9 million followers

Twitter publicity value: $35,012

Total Publicity Value: $345,835

I’m going to go out on a limb here and bet that a Nobel laureate’s commencement lecture probably does not attract the same amount of coverage — unless that laureate is being written up precisely because she’s earning less than a reality TV star.

(For a similar exercise, see this post on Spider-man economics.)

Article source: http://feeds.nytimes.com/click.phdo?i=866557aa19ccd491d6414f49ffd75924

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