15 Mar 11 How much is your time worth? NBC gives you a price.
Quick: how much is an hour of your time worth?
NBC thinks you’re about $240 an hour.
To promote their upcoming show “America’s Next Great Restaurant” (which, incidentally, sounded like a cool concept to me), NBC recently ran a very interesting video campaign. NBC partnered with LivingSocial — the Amazon-invested Groupon clone.
After consumers completed their order they were given an option: ”Take 30 seconds to watch the trailer for NBC’s newest show and receive $2 off right now on the deal just purchased!”
Thus, NBC values your time at $2/:30seconds –> $4/minute –> $240/hour. That’s pretty good.
What’s interesting to me is not only their “valuation” of you and your time. What I like about it is the novel and creative way to spend online media dollars.
I can’t be sure, but as I see it there are two ways that LivingSocial and NBC priced this out:
- LivingSocial charged NBC a flat CPM of, say, $15 and then the $2 savings to the consumer was essentially a pass-through. (NBC did a similar promotion last month for buy-one-get-one-free burritos at Chipotle).
- LivingSocial considered NBC like any other vendor/client and charged them a $4 CPC and then took 50%, thus preserving their external-facing pricing model (to either advertisers or merchants), and in turn providing the viewer with a $2 savings.
Either way, looking at other forms of digital video, how does it compare? The best comparison to me would be YouTube’s TrueView model, with the payment method being a Cost Per View (CPV) metric, equivalent to the click-to-play that LivingSocial offered.
In both cases, you pay only for opted-in, engaged views. But CPVs on YouTube are much lower than $4. Despite/because of auction pricing, YouTube paid views are generally an order of magnitude or so lower. And with the LivingSocial deal, the advertiser does not benefit from targeting or reach/scale beyond the sales LivingSocial was able to put together that day. While not a raw deal for NBC, I think there are other, more efficient ways to spend those ad dollars. Granted, not all of them are as splashy (or as I said, as creative).
One question remains about intrinsic and extrinsic motivators — would you be moved to watch the video to save $2? Let me know in the comments. Ultimately, I think the psychological benefits are big here: at the end of the day, I’m getting paid to watch that video.
Tags: amazon, america's next great restaurant, bj fogg, chipotle, cost per view, CPC, CPM, CPV, daniel pink, deals, extrinsic, groupon, intrinsic, livingsocial, nbc, trueview, YouTube
