Brand Oprah Has Some Marketing Lessons

In 1988, Oprah Winfrey made a decision that would change her life—and eventually the future of television. Her talk show was already getting better ratings than kingpin Phil Donahue and aired in 198 markets. When she renegotiated her contract with King World Productions, which syndicated her show, and with ABC (DIS), which produced it, Winfrey demanded control and got it. Winfrey's Harpo Productions assumed the show's production costs, but it also collected licensing fees from local stations, estimated at $100 million in 1988. Plus, Harpo earned money from a few lucrative moments of advertising each day. "I never wanted to be in a position again in life where I was meant to do something but couldn't do it because somebody was telling me I couldn't," Winfrey later told writers of a Harvard Business School case study.

The impulse to take control of her life—and then enjoy it—resonated with her viewers over a 25-year span that will end on May 25, when she airs her finale on broadcast television and turns her attention to her new cable channel. Over that time, Oprah became a singular brand born of her own personal history. Winfrey's story of childhood poverty and sexual abuse, her struggle with her weight, and her striving and charisma made her the near-perfect peddler of a relentless optimism. She was more than a celebrity: She stood for self-improvement, doing good, and controlling your own destiny. Her motto, "Live your best life," was invoked on her show, in her magazine, and on her website.

It all added up to a brand radically different but no less powerful than Coca-Cola (KO) or the Marlboro Man. It propelled her show, which drew about 12 million viewers in the U.S. at its peak, through more than 4,500 episodes and some 30,000 guests. She stayed on message as she launched her magazine and produced movies and developed a raft of syndicated television shows including those of Dr. Phil McGraw and Rachael Ray. The brand ultimately made the meticulously manicured entrepreneur very rich, with an estimated fortune of $2.7 billion, according to Forbes. "I'm hard-pressed to think of a stronger brand than Oprah, and I've studied 200 years of brands," says Harvard Business School professor Nancy F. Koehn.

Winfrey's other great talent was to combine her message with a rousing consumerism absent even a hint of irony: Treat yourself! You deserve it! Her viewers and readers bought in and bought big. The brand's marketing fairy dust was sprinkled on an array of products she endorsed without compensation, somehow adding to her already robust credibility. One day she might talk about age-defying makeovers, the next about the faces of autism; she went to Ethiopia; she went green; she went vegan. And then she went shopping. "For her, transformation is about self-esteem and about buying stuff," says Susan Mackey-Kallis, a communications professor at Villanova University. "It's consumerism, but it's not crass."

Winfrey, who declined comment for this story, has helped turn her favorite books into bestsellers and her favorite things into instant successes. After she recommended Eckhart Tolle's A New Earth in January 2008, it topped the bestseller list on (AMZN). Within a month, Penguin Group had shipped 3.5 million copies. Her "Oprah's Book Club" plugged 65 books and was credited by some with saving the publishing industry.

Winfrey regularly announced her "favorite things" in shows that were tantamount to infomercials, though far more effective. When DreamTime's Foot Cozys, aromatherapy slippers, were featured on an episode in 2002, the company was selling 3,000 pairs a month. The following month, it sold 20,000. The slippers became DreamTime's best-selling product that year. When Winfrey presented such goodies to her audience, it was the companies (from Williams-Sonoma to Apple (AAPL)) that donated them. The big shows—in which audiences received cars and trips—inspired the fervor of revival meetings. "Product placement is a fair way to describe her 'favorite things,'" says Kevin Lane Keller, a marketing professor at Dartmouth's Tuck School of Business. "But she is the one who is brokering those deals for her audience. It's product placement in a funny kind of way because the companies are giving the product away." Her brand could sell everything from croissants to refrigerators. Chicago blogger Robyn Okrant bought everything Winfrey recommended in 2008, spending nearly $4,800.

Like any great marketer, Winfrey has sought to extend her brand's reach. She has launched the TV careers of other live-your-best-life gurus, such as Dr. Oz and the designer Nate Berkus—whose shows Harpo developed. She even made her personal trainer, Bob Greene, a celebrity. He now sells his own fitness and diet books. "She creates this army of celebrities who are all part of the same campaign," says Mackey-Kallis. "That's an economy of scale and lets her have an exponential impact."

Winfrey's empire also includes a monthly magazine published by Hearst, O, The Oprah Magazine, that combines her do-good and enjoy-good-things ethos and has a circulation of about 2.5 million. (She's been on the cover of every issue.) Even most of Harpo's feature films and television movies—including The Great Debaters and Tuesdays with Morrie—have been emotionally rich dramas about reinvention.

Winfrey has stoked some controversy along the way. She gave credence to Suzanne Somers's questionable anti-aging hormone and vitamin regimen and Jenny McCarthy's book linking vaccines and autism. Her school for girls in South Africa was hit with allegations of sexual abuse. Yet these embarrassments barely affected Winfrey's standing. "Her moral character hasn't been questioned," says Keller. "There haven't been any personal transgressions." The resilience of her brand didn't surprise the experts. "All strong brands are authentic, relevant, and different," says Josh Feldmeth, chief executive officer of consultancy Interbrand's New York office. "Oprah performs as well as anything in the market today."

Still, as Winfrey prepares to move to cable, there are signs she's preparing her brand for a shift. In October she appeared via satellite on Comedy Central's The Daily Show with Jon Stewart and announced she was giving everyone in the audience a free trip to Washington to attend the rally that Stewart and Stephen Colbert were organizing. "She was going on Jon Stewart's show to cash in on his cultural power," says Robert Thompson, a professor of popular culture at Syracuse University. "She wanted to start courting younger viewers for her cable network. It was the first time we saw Oprah trying to suck the cultural mojo from someone else."

Janice Peck, author of The Age of Oprah: Cultural Icon for the Neoliberal Era, points out that Winfrey is a baby boomer, and that "her historical moment is passing." Even Feldmeth says the big trends are no longer in Winfrey's favor. "If credibility and expertise come more from our social networks, are we still going to be sitting at the feet of a master like Oprah?" he asks.

The bottom line: The power of the Oprah brand has sold Winfrey's talk show, magazine, and hundreds of products. She'll now test it on cable.

    Before it's here, it's on the Bloomberg Terminal.