United's $34.2 Million "Re-Accomodation"

United's unfortunate "re-accomodation" of a passenger went viral today with coverage blanketing Twitter, Facebook, Reddit, and news sites. This is hardly United's first such debacle, and there's an urban legend that the viral "United Breaks Guitars" video cost the company $180 million. That number is almost certainly too high, but it got me wondering how to price the negative publicity from this go-around.

One way to to look at how much it would cost to buy advertising exposure equal to all the coverage that United's gotten and then scale it up to account for the intensity of this particular video. There are lots of estimates involved, but we should be able to get into the right ballpark by looking at a few different categories:

Online video: The original video has been copied all over the place, so exact view counts are hard to track down. This streamable copy has 1.5 million views right now, for instance, but it's just one of many. As of a couple hours ago, the LA Times reported 6 million views but it's not clear if they were counting all sources. I think a grand total of 10 million is a reasonable estimate. Advertising costs are frequently measured as cost per thousand views (CPM). Youtube's CPM is about $7.50 per 1000. The United video is about twice as long as a normal ad, so let's double that to $15 CPM, for a cost of $150,000.

Reddit: The self-proclaimed "Front Page of the Internet" doesn't share traffic numbers, but recent estimates are as high as 250 million page views per day. As someone who contributes to that number, I can attest that a large proportion of those page views today included either links directly related to the United debacle or rehashing of other negative facts about United. Let's estimate that 25 million (10%) of those page views had something negative about United on them. With Reddit's CPM of $2, that works out to another $50,000. Running total: $200,000.

Social Media: The original videos were posted on Twitter. Playing around with a few hashtags on Keyhole suggests that there were about 6 million impressions related to this. Twitter has a CPM of about $9, so that gives us another $54,000. Facebook makes it hard to track these numbers, but they have about 5x the users of Twitter, so let's estimate that at another $270,000. Running total: $524,000.

Online news articles: According to Google trends, 2,500 articles were published about United today. The price of sponsored content varies wildly from publication to publication, but based on this source an average cost of $200/article seems reasonable. That gives us $500,000. Running total: $1.02 million.

TV News: Buying a 30 second commercial during the nightly broadcast for all 3 television networks costs about $300,000. Scaling that up to 3 minute segments would cost $1.8 million. Running total: $2.82 million.

Radio: Detailed statistics on radio listeners are frustratingly hard to find. However, the number of Americans who listen to radio is about the same as the number who watch TV, and advertising costs are about a third the cost, so let's estimate the radio coverage at a value of $600.000. Running total: $3.42 million.

Now comes the tricky part. United would have to spend about $3.4 million on advertising to get the reach of this video. Watching a viral video of a passenger being assaulted is hardly the exact equivalent of listening to a banal 30 second ad about how great United is. The video provokes a visceral response, which is exactly why it's gotten so much traction. There's not much literature on how the harm of a video like this compares to the positive value of advertising. (For that matter, there's not much literature on the value of advertising in general, but that's a story for a different day.)

Faced with this challenge, I employed a statistical technique used as the "fudge factor." I asked my wife if the effect of this video was at least 10 times the effect of a positive ad. She nodded. Since I'm not one to disagree with my wife, this gives us a final cost to United of $34.2 million. For that much, they could have simply given the passenger a Boeing 737 (cost: $32 million) and had a couple million left over.

Max Rosett

Software engineer and data scientist. Wasatch Mountains devotee; temporary resident of a tragically flat state.

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