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Is the Thanksgiving Day Parade Worth It for Macy’s?
Macy’s has long said it considers the Macy’s Thanksgiving Day Parade its “annual gift to the nation,” but it has never indicated whether it’s losing significant money on the event, close to breaking even, or notching a profit some years.
The spectacle, privately funded by Macy’s, comes at an exorbitant cost, with the 97th edition in 2023 including 16 featured character balloons, 26 floats, 32 heritage and novelty balloons, more than 700 clowns, 12 marching bands, and nine performance groups.
A 2016 appraisal from the online shopping site Rakuten estimated that the annual costs for the parade are between $10.4 million and $12.3 million, while a more up-to-date estimate comes from GoBankingRates.com in 2022 and says the cost for the parade “can exceed $13 million.”
Among the costs:
- Filling every balloon with helium costs a minimum of $510,000. For sponsors, a new balloon costs $190,000, which is reduced to $90,000 for each returning year.
- Costumes (i.e., clowns, gingerbread kids, sugar plum fairies, and Santa and his helpers) carry estimated annual costs of $2 million.
- 26 full-time workers and around 14 temporary workers (i.e., painters, construction workers, metal workers, and sculptors) are paid a combined $1.3 million.
Time is another cost, as the parade requires 3,000 balloon handlers, all Macy’s employees. Each undergoes three months of balloon handling training.
Many of the monetary costs are offset by broadcast rights. The 2022 Macy’s Thanksgiving Parade earned a 7.2 rating in the 18-49 demo and had 27.7 million viewers — including digital, streaming on Peacock, and encore viewing — which is the most total viewers in five years, according to Nielsen.
Cher and Jon Batiste are two of the headlining performers for this year’s parade, and actors from multiple Broadway shows, including “Back to the Future: The Musical,” will be performing as well.
“A brand chooses to participate because of the exposure of the parade — it’s not about the financial ROI,” Jordan Dabby, VP of partnership marketing at Macy’s, told Ad Age. “They’re doing it to connect with fans.”
Funding the parade comes as Macy’s in 2020 announced plans to close at least 125 stores over the following three years and eliminate about 2,000 jobs after a similar move in 2016 amid persistent challenges facing the department store model.
Nonetheless, a 2019 Footwear News article found benefits from Macy’s continued sponsorship. Jim Cusson, president of retail marketing agency Theory House, told the publication, “It’s an opportunity for Macy’s to confirm their place in American culture by supporting the parade — and in the busiest shopping season of the year, it gives them this unique opportunity to stand out above all the other retailers based on that sponsorship.”
Discussion Questions
Should Macy’s continue to fund the Thanksgiving Day Parade if it loses money? Do the sponsorship benefits appear to offset the costs?
Poll
Loading …BrainTrust
Jeff Sward
Founding Partner, Merchandising Metrics
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
I have always found it rather ironic that a retailer that is so poor at creating any magic in its own stores, can be so brilliant at putting on a parade each year. But brilliant is exactly the word I would use to describe what Macy’s does on Thanksgiving Day. The parade is seen by millions of people in the US (and around the world) and Macy’s is front and center of it all. It is excellent marketing and advertising that buys Macy’s a lot of goodwill. How that translates into sales is anyone’s guess, but it certainly helps rather than hinders. Macy’s has always described the parade as its gift to the nation and it deserves gratitude and praise for that.
Let’s keep this in perspective: Macy’s generated over $25B in sales last year, so spending $10M or $13M on a truly iconic, world-famous event like the annual Thanksgiving Day parade is a small sum to pay for the exposure and meaning this event has come to represent to people across the nation and beyond. I would add that at a time in human history where there seems to be so much strife and conflict, the Macy’s parade provides an especially welcomed respite. It’s extremely difficult to calculate the hard ROI of any event sponsorship, and some activities, like the Macy’s Day parade, transcend the need to. Happy Thanksgiving.
It is absolutely worth it. At double the numbers discussed it would be worth it. What does 60 seconds during the Super Bowl cost these days? At this point, the parade is integral to Macy’s DNA. It’s hard to imagine what the circumstances would have to be that would lead to a decision to cancel the parade.
I worked for Macy’s in Atlanta after the Macy’s/Federated deal many years ago. Atlanta had a mini version of the parade. And even that parade was a great source of pride to the employees, never mind the great reception customers gave the parade. The Thanksgiving Day parade and the One Day Sale may be opposite pillars of the Macy’s DNA these days, but I can only hope that the magical thinking behind the parade finds its way back into the stores the other 364 days of the year.
The parade is probably unaffordable, however from a branding standpoint to walk away from sponsoring it would be like saying “we are going to declare bankruptcy within the year”.
So they are stuck with it whether affordable or not.
Despite potential financial losses, Macy’s should continue funding the Thanksgiving Day Parade. The event’s cultural impact and promotional value far outweigh the costs, solidifying Macy’s presence in American culture, creating a unique holiday brand connection, positive public relations, and powerful brand-building opportunities.
The advantages of sponsoring Macy’s Thanksgiving Day Parade, appear to surpass the associated costs.
Taking a break while the turkey cooks and clicking around online. In my Facebook Memories today I found this 2016 quote from Jeff Gennette: “The strength of the Macy’s Thanksgiving Day parade is tradition, and that hasn’t changed.” And it never should.
I haven’t missed a Macy’s Parade in over 60 years. Do I think the Thanksgiving Day Parade is worth it? You bet I do. Happy Thanksgiving, everyone!
Mark Ryski said it well. It is a part of American culture and a positive aspect of the holiday season., A Super Bowl ad cost $7 million for 30 seconds and doesn’t not provide the save level of engagement or lasting memory as the parade. That should provide some perspective.
If there is one time of the year that Macy’s and Americana converge it is the Thanksgiving Parade. I think Macy’s would give this up as a last resort and I can name a few companies that would probably open up the check book (whether they have the personnel is a different discussion) to sponsor the event.
“Never say never” as the saying goes – Macy’s has cut many cultural touchstones at the regional chains they acquired, banking everything into New York and those Mariah Carey commercials – a TV play for everywhere outside the Tri-State Area. Chicago, Detroit, and Minneapolis have not forgotten how important Santa Bear and Frango Mints were, and Macy’s relevance in the Midwest has fallen off a cliff – if it can happen to us it can happen to the Big Apple.