Pr Agency Gets $156mm Reward For Failed $1.37mm Obamacare Video Promotion

richard simmons

Way back in in the 1950s, Dr. Jonas Salk’s personal motto was, “The reward for work well done is the opportunity to do more.” Six decades later, Covered California, the state Obamacare exchange, put a new spin on it: The reward for work poorly done at exorbitantly inflated cost is the opportunity to do more work for over 100 times as much money. As Watchdog.org reported July 1, “A publicity firm that produced a costly webcast for California Obamacare featuring a gyrating Richard Simmons” – a four-minute-twenty-three-second video costing $1.37 million – “was retained, along with another company, for three more years at a cost of $156 million. One legislator demands an audit.” According to Covered California Director Peter Lee, the Tell a Friend – Get Covered video was supposed to do two things: First, save media costs by running only on free social media, such as YouTube. And second, it was supposed to resonate with healthy Millennials – who, as you might recall, have little need for health care services at their age but whose premiums are vital for subsidizing the care of older, richer Americans. The video was just loaded with “content that resonates among Millennials and that can be spread by Millennials to their friends and loved ones,” Lee said. “Millennials are not only our key audience, they also are our ambassadors in spreading the word about Covered California.”

And who’s more resonant with Millennials than the star of the video…Richard Simmons?

Specifically, with Richard Simmons “wearing red tights and a black sequined tank top…joined by a contortionist for a dance competition. Part of Simmons’ routine involved “writhing on the ground and peeking through his split legs” while “a DJ played dance music and the program’s hostess sang, ‘Get covered, hashtag, Uh huh,’ and ‘This is beautiful … I feel inspired to tell my friends to sign up online. That was beautiful, Richard!'”

So it’s no wonder that Ted Gaines, vice chairman of the State Senate Standing Committee on Insurance, is calling for an audit, to determine just what California got for 1.37 million of its citizens’ tax dollars and why the state is throwing more than 100 times as much good money – 114 times as much, to be specific – after bad. “Ogilvy [Public Relations, the agency that produced the Simmons video] made some major mistakes in their advanced outreach, specifically with the use of Richard Simmons. The video bombed; I wasn’t able to get satisfactory answers as to what they accomplished with this,” he stated. “Why are they being rewarded with a renewed contract when they wasted taxpayer money?” he asked.

One thing California’s $1.37 million wasn’t buying was media exposure. Posting a video on YouTube is free. Another thing it wasn’t buying was celebrity talent; the C-list celebrities – including Simmons, Olivia Wilde, Tatyana Ali, Fran Drescher, contortionist Nathan Barnatt, and hostess Hannah Hart, star of the ever-popular YouTube series “My Drunk Kitchen” – donated their talents, such as they are – for free. You’ll see from the video itself that the $1.37 million bought next to nothing in the way of production values. As PJ Media’s Stephen Green blogs, “The studio cost little, the kind of place you rent in Los Angeles to shoot a Cornballer informercial. The studio audience is made up of people who show up for these things to “get on TV!” and also maybe for juice. The production crew? Bare bones. The writing credits, should there actually be any, couldn’t have cost enough to cover the deductible on an ♡bamaCare!!! Silver plan.”

Even worse, it bought next to nothing in the way of viewership. “[I]n over a year there isn’t a version of it on YouTube with even 25,000 views,” Green notes. Using an industry measure of media efficiency, cost per thousand (CPM), a $1.37 million video reaching 25,000 viewers has a $54,800 CPM, which is three to four orders of magnitude higher than media averages. According to 2010 Morgan Stanley research, broadcast television has the highest media cost, averaging $28 CPM. Print media – magazines and newspapers – are next with CPM averaging $16, followed by radio ($10 CPM), Out Of Home ($5 CPM), and Internet ($3 CPM). A $54,800 CPM not only isn’t in the same ballpark; it’s not even on the same planet.

The Richard Simmons fiasco and Covered California’s current $78 million revenue shortfall notwithstanding, the government agency awarded Ogilvy Public Relations and Campbell Ewald a three-year, $156 million contract to “creat[e] a media campaign to entice new enrolees, specifically minorities.” Hey, given all they accomplished with just a measly $1.37 million, you can imagine what they’ll do with 114 times as much dough to play with.

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