Freakonomics Radio
612. Is Macy’s Thanksgiving Parade Its Most Valuable Asset?
· Summarized
Key takeaways
- The Macy's Thanksgiving Day Parade serves as a significant marketing event, attracting millions of viewers and hefty advertising revenue.
- Behind the scenes, the parade requires extensive planning, coordination, and collaboration among various stakeholders, including Macy's executives and city officials.
- Macy's treats the parade as a 'gift to the nation,' emphasizing tradition while also using it as a strategic marketing opportunity to promote its brand and those of its sponsors.
- Participation in the parade can greatly enhance brand visibility, as illustrated by the experiences of authors and companies with balloon sponsorships.
- The city of New York itself is a vital player in the parade's execution, providing necessary resources and support, though the financial breakdown of these contributions is opaque.
Summary
Inflation Night and the Magic of the Macy's Parade
Stephen Dubner reflects on the experience of witnessing the Macy's Thanksgiving Day Parade's inflation night, describing the spectacle as a blend of childhood joy and military efficiency. This event takes place on the Upper West Side of Manhattan, where giant balloons are inflated and prepared for the parade. The atmosphere draws thousands of locals and visitors who marvel at the whimsical sight of beloved characters taking shape, creating a unique and festive event the night before Thanksgiving.
Economic Impact of the Parade
The episode dives into the economics of the parade, raising questions about its production costs and advertising revenue. Despite estimates suggesting the parade costs between $10-15 million to produce, the actual figures are difficult to ascertain as Macy's keeps this information private. Dubner explains how the parade serves as a marketing tool for sponsors who float their products in front of millions of eyeballs on television, making it a lucrative opportunity despite the operational challenges.
Insights from Macy's Executives
Listeners hear directly from key Macy's executives, such as Will Kos, the executive producer of the parade, and Jen Neal from NBC. They share insights on the logistical complexities of producing the parade, revealing that it requires detailed planning that begins almost immediately after the last parade ends. They discuss how tradition blends with modern needs for entertainment, making the parade a historically significant yet dynamically evolving event.
The Relationship with Brands and Balloons
The podcast explores the partnerships between Macy's and the brands represented by the balloons in the parade. Each balloon is essentially an advertisement, and brands pay to sponsor them, coveting the vast audience that watches the parade. Jeff Kinney, author of Diary of a Wimpy Kid, shares the history and marketing strategies behind the inclusion of his balloon, highlighting how participation in the parade has positively impacted brand visibility and sales.
The Role of New York City
The episode emphasizes the crucial role that New York City plays in the parade's success. City resources, from police to sanitation, are necessary to ensure smooth operations, yet the financial arrangements between Macy's and the city remain somewhat unclear. Officials discuss the logistics of permits, public safety, and the challenge of maintaining the city's famed image on parade day.
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Show notes
The 166-year-old chain, which is fighting extinction, calls the parade its “gift to the nation.” With 30 million TV viewers, it’s also a big moneymaker. At least we think it is — Macy’s is famously tight-lipped about parade economics. We try to loosen them up. (Part one of a two-part series.)
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- SOURCES:
- John Cheney, carpenter at Macy’s Studios.
- Will Coss, vice president and executive producer of Macy’s Studios.
- Jeff Kinney, author, cartoonist, and owner of An Unlikely Story Bookstore and Café.
- Kevin Lynch, vice president of global helium at Messer.
- Jen Neal, executive vice president of live events and specials for NBCUniversal Entertainment
- Tony Spring, chairman and C.E.O. of Macy's Inc.
- Jessica Tisch, commissioner of the New York City Department of Sanitation; incoming commissioner of the New York City Police Department.
- Dawn Tolson, executive director of Citywide Event Coordination and Management and the Street Activity Permit Office for the City of New York.
- RESOURCES:
- Macy's: The Store. The Star. The Story., by Robert M. Grippo (2009).
- History of Macy's of New York, 1853-1919: Chapters in the Evolution of the Department Store, by Ralph M. Hower (1943).
- Macy's Thanksgiving Day Parade.
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