The event requires about ten thousand people to put on and most of those people are volunteers, but the labor cost of the people who are employed by the parade comes out to 1.3 million dollars. This is only a fraction of the total cost of the parade which can amount to 11.6 and 13.4 million dollars for an event that only lasts a few hours. The massive floats each require very large amounts of helium which costs about five hundred and ten thousand dollars per balloon to fill up. This cost is burdened by the parade association and is partially offset by the two hundred thousand dollars that sponsors have to pay for the new floats included in the parade. While this cost may seem extravagant the opportunity cost of not sponsoring a float in this parade, if the company can afford it, is much larger than those couple hundred thousand dollars. Making it an economically responsible choice for franchises associated with large companies like Nickelodeon and Disney who can float the cost of sponsoring the parade. Broadway shows that participate in the parade also benefit, with their ticket sale increases generating an additional three hundred thousand dollars for all of the shows participating. Taken together, the Macy’s Thanksgiving Day parade, an event viewed by fifty million people, is a great way for companies to increase their revenue, demonstrating how closely different industries are connected in terms of economics.
Sources
https://www.cbsnews.com/news/thanksgiving-day-2018-parade-float-costs/
https://www.forbes.com/sites/hayleycuccinello/2016/11/23/the-macys-thanksgiving-day-parade-2016-by-the-numbers/#3a2f88216527https://www.citylab.com/life/2018/11/macys-thanksgiving-day-parade-costs/576466/
Great post! I personally love the Thanksgiving day parade so I found this post very interesting! I liked how added that it was a good idea for companies to pay the mass amount of cost needed for advertising. Many people probably think it would be a bad idea because of the cost, but the sales that a company gets in return makes up for it.
ReplyDeleteI was really surprised by the cost of the Thanksgiving Day Parade. I had no idea just the helium would cost $510,000. I was also kind of confused however. You said that the cost of the balloon is offset by the brand who pays $200,000, but I assumed that the sponsor would also pay for the helium, so I'm kind of confused which one it is. I was also thinking that revenues probably go up not only for brands that sponsor balloons but also for Macy's itself.
ReplyDeleteI remember watching the Macy's Thanksgiving Day Parade as a kid and being amazed by the huge floats and balloons. Who knew it cost so much! Even down to the helium used to fill up the massive balloons is an expensive I would never have thought of. Although the parade is crazy expensive it does make sense by the opportunity costs of not having a float would be creating then paying to be in the parade. There are so many viewers who watch the parade every year and it is the perfect place for advertising in the form of entertainment.
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