Oprah Brought Millions in Free Publicity to Weight Watchersby and
How much free advertising did Oprah Winfrey’s deal with Weight Watchers bring? More than 1 billion media impressions, the company said.
Following Winfrey’s agreement to invest in Weight Watchers International Inc. and endorse the program in October, the company got a surge of free publicity, according to a regulatory filing on Wednesday. Each impression represents a time that a viewer was exposed to a mention of Weight Watchers.
The company is counting on Winfrey to help turn around its ailing business, but it’s hard to gauge the deal’s financial impact so far. Weight Watchers posted a loss of 3 cents a share in the fourth quarter, excluding some items. Analysts had estimated a gain of 2 cents on average. The program’s active subscribers fell 4.8 percent in the period from a year earlier -- though that was less of a decrease than the company experienced in the third quarter.
It could have cost Weight Watchers as much as $17.5 million to generate 1 billion media impressions, depending on where the advertisements were placed, according to calculations by Apex Marketing Group Inc. This year, a 30-second advertisement during the Super Bowl sold for as much as $5 million, while a similar spot went for a high of $2.2 million during the Oscars, according to Apex.
“Her power in the media and positive public perception provided Weight Watchers with increased brand association and valuable paid media,” said Eric Smallwood, a managing partner at Apex. “She definitely has the Midas touch.”
As part of their agreement, Weight Watchers sold roughly a 10th of the company to Winfrey for about $43.2 million. The company also granted Winfrey the right to buy 3.5 million shares at a price of $6.97 apiece.
The stock rose 12 percent to $14.04 on Thursday, valuing her 10 percent stake at about $89 million. That means Winfrey has more than doubled her investment, not including the options. Still, the shares were up even more before Weight Watchers’ latest earnings report.
Weight Watchers’ filing also revealed how much the company itself has slimmed down over the past year. It had about 19,000 employees as of Jan. 2, down from 21,000 a year earlier.