The economics of advertising the oldest profession
October 19, 2010 8:52 AM Subscribe
Explain to me the economics of prostitution advertising in Vegas - specifically the people who stand on the street corners on the strip and hand out cards/books with photos & phone numbers.
How is this marketing cost effective?
Are they (the people at the top of the prostitution business) just paying these guys like $10/$20 a day to stand there and hand the stuff out? Certainly this can't be a real job with real wages, right?
And even if it is the $20/day, there have to be at least 100 of these people out there (and they'll stand on the same street corners), plus the cost of the cards/books (that all end up on the street three steps later) and it seems like a totally losing prospect here.
How does this work? Is it just to ensure that when someone is looking for a hooker, they only think of one place to turn, or something more complex (involving competing prostitution rings, the mob and Elvis, right)?
How is this marketing cost effective?
Are they (the people at the top of the prostitution business) just paying these guys like $10/$20 a day to stand there and hand the stuff out? Certainly this can't be a real job with real wages, right?
And even if it is the $20/day, there have to be at least 100 of these people out there (and they'll stand on the same street corners), plus the cost of the cards/books (that all end up on the street three steps later) and it seems like a totally losing prospect here.
How does this work? Is it just to ensure that when someone is looking for a hooker, they only think of one place to turn, or something more complex (involving competing prostitution rings, the mob and Elvis, right)?
Google "Porn Slappers" and there's a bunch of information. Here are a couple of links. This article in the LV Review says they make $60 per 10 hour day. I also found this discussion interesting. There must be a lot of people buying.
posted by iscavenger at 9:13 AM on October 19, 2010
posted by iscavenger at 9:13 AM on October 19, 2010
When I was there I noticed some of the cards had numbers printed on them. I wonder if the person handing out the card gets a kickback if the customer presents that card? That way the top people really aren't paying them hourly or daily, it would be commission-based. Not sure if that's correct but that would be my guess.
posted by halseyaa at 9:15 AM on October 19, 2010
posted by halseyaa at 9:15 AM on October 19, 2010
I think if you go to any big city you'll find people that hand out flyers/cards for all sorts of things and events. Typically they get paid for handing out all the cards or putting them on parked car windshields. Sure, most end up on the ground or in the trash but that is the mechanics of blanket marketing. I guess the same goes for any type of advertising from commercials to internet ads, to billboards. They all cost money for a limited return on the investment.
So yeah, your question of whether paid advertising works is YES, it does.
posted by JJ86 at 9:54 AM on October 19, 2010
So yeah, your question of whether paid advertising works is YES, it does.
posted by JJ86 at 9:54 AM on October 19, 2010
Best answer: Once one escort agency starts doing it, they all have to do it, don't they? Say you're a John in Vegas, in the market for a hooker. Agency A has guys passing out cards, right outside your hotel; Agency B doesn't. How are you even going to know about Agency B?
If they're all doing, they can price their services to cover the cost of printing and whatever fees they pay the guys who hand out the cards. And since, presumably, all the agencies incur these fees, it's going to affect their profit margins all the same way. So getting a hooker from A is going to cost you about as much as getting a hooker from B.
Via my own research (on Google, I swear), it looks like a hooker will run you $300 to $500 bucks, though I'm sure there are high-end ones that will run you more. That's $300 to $500 and HOUR. If a hooker makes, say, $400 an hour and sees four customers a day, that $1200 a day.
Let's say she gives $600 of that to her agency. (I'm making that up. I have no idea how much they give to their pimps.) And let's say that the agency has 10 girls working for it. That's $6,000 a day. Over $200,000 a year. Untaxed, I assume. That probably goes in one or two guys' pockets. Why would hey have a large staff? My guess is that these places have few expenses outside of printing and hiring cheap workers to pass out fliers. They're doing okay.
posted by grumblebee at 10:49 AM on October 19, 2010
If they're all doing, they can price their services to cover the cost of printing and whatever fees they pay the guys who hand out the cards. And since, presumably, all the agencies incur these fees, it's going to affect their profit margins all the same way. So getting a hooker from A is going to cost you about as much as getting a hooker from B.
Via my own research (on Google, I swear), it looks like a hooker will run you $300 to $500 bucks, though I'm sure there are high-end ones that will run you more. That's $300 to $500 and HOUR. If a hooker makes, say, $400 an hour and sees four customers a day, that $1200 a day.
Let's say she gives $600 of that to her agency. (I'm making that up. I have no idea how much they give to their pimps.) And let's say that the agency has 10 girls working for it. That's $6,000 a day. Over $200,000 a year. Untaxed, I assume. That probably goes in one or two guys' pockets. Why would hey have a large staff? My guess is that these places have few expenses outside of printing and hiring cheap workers to pass out fliers. They're doing okay.
posted by grumblebee at 10:49 AM on October 19, 2010
Could you clarify what seems improbable about this?
I've been handed fliers for comedy clubs, tailors, and restaurants, and I suspect all those industries have smaller advertising budgets than prostitutes.
Prostitutes, after all, must have a relatively high advertising budget because:
a) their clients presumably view them as very close substitutes for one another, so they need to compete and set themselves apart;
b) almost 100% of their cost-of-doing-business comes in the form of reaching out to customers (what else do you need? assuming you perform in-calls, your only expenses are advertising, condoms, STD tests, state licensing, and labor);
c) a higher proportion of them may be new industry entrants without established clienteles.
posted by foursentences at 10:50 AM on October 19, 2010
I've been handed fliers for comedy clubs, tailors, and restaurants, and I suspect all those industries have smaller advertising budgets than prostitutes.
Prostitutes, after all, must have a relatively high advertising budget because:
a) their clients presumably view them as very close substitutes for one another, so they need to compete and set themselves apart;
b) almost 100% of their cost-of-doing-business comes in the form of reaching out to customers (what else do you need? assuming you perform in-calls, your only expenses are advertising, condoms, STD tests, state licensing, and labor);
c) a higher proportion of them may be new industry entrants without established clienteles.
posted by foursentences at 10:50 AM on October 19, 2010
Response by poster: The improability of it to me is twofold:
1. Prostitution is illegal and $60/10hrs is too (and that makes me think illegal immigrants, which is another broken law) So how are these guys still on every corner? I mean, I guess sex sells Vegas and so anyone in a position to stop it turns the blind eye to keep up the city's sinful reputation?
2. Contrasting to other flyer advertising I've seen, it seems like a much much much higher % of people don't take one and/or drop it on the street within 3 steps.
I understand that if it works, it works. And that for an illegal business you can't exactly get a billboard-but the whole operation still seemed bizarre to me.
posted by ish__ at 11:56 AM on October 19, 2010
1. Prostitution is illegal and $60/10hrs is too (and that makes me think illegal immigrants, which is another broken law) So how are these guys still on every corner? I mean, I guess sex sells Vegas and so anyone in a position to stop it turns the blind eye to keep up the city's sinful reputation?
2. Contrasting to other flyer advertising I've seen, it seems like a much much much higher % of people don't take one and/or drop it on the street within 3 steps.
I understand that if it works, it works. And that for an illegal business you can't exactly get a billboard-but the whole operation still seemed bizarre to me.
posted by ish__ at 11:56 AM on October 19, 2010
Best answer: Re your #1: Prostitution may be illegal, but I would guess that the advertisers are doing what "adult services" advertisers everywhere do, and obfuscating the nature of the business just enough that it's not worthwhile for the police to harrass them. (See for instance the ads for prostitutes in the back pages of local alt weeklies.) From that point, it's basically the same advertising model as any other sandwich board wearer or flier-doler-outer.
Re your #2: It's a numbers game. You don't need everyone who receives a flier to treasure it and call up the hooker in question ASAP. You need some tiny percentage to do that. And with prostitution, since the overhead is low and prices are high, you probably don't need as many takers as you would if you were fliering for a nail salon or what have you.
Consider, also, that a LOT of men go to Vegas specifically as sex tourists. Which means that for every ten grannies who drop the flier like a hot rock, there is a dude who is now armed with exactly the information he needs.
posted by Sara C. at 12:09 PM on October 19, 2010
Re your #2: It's a numbers game. You don't need everyone who receives a flier to treasure it and call up the hooker in question ASAP. You need some tiny percentage to do that. And with prostitution, since the overhead is low and prices are high, you probably don't need as many takers as you would if you were fliering for a nail salon or what have you.
Consider, also, that a LOT of men go to Vegas specifically as sex tourists. Which means that for every ten grannies who drop the flier like a hot rock, there is a dude who is now armed with exactly the information he needs.
posted by Sara C. at 12:09 PM on October 19, 2010
I guess sex sells Vegas and so anyone in a position to stop it turns the blind eye to keep up the city's sinful reputation?
Sadly for me (because I'm not fond of the place), I go to Vegas every years for work. I'd say prostitution is illegal there the way pot is illegal in many places. It's tolerated as long as no one jumps up and down and yells, "I NEED A HOOKER!" or "HEY, I'M A HOOKER!"
Although...
Once I was in a major strip hotel, walking to get some pizza by the casino. A woman walked by me and seemed to work hard to catch my eye. Whatever. I kept walking. On the way back, with my slice, she came walking towards me again and said -- loudly -- "Hey! You want a HOOKER? Because that's what I DO!" She seemed totally unworried about being caught. (She didn't seem like she was drunk or on drugs -- just an aggressive business woman.) And, honestly, if you hang around in many of the casinos starting at 10pm or so, it's pretty easy to spot the working girls. If law enforcement really wanted to stop them, they could.
But the hotels want business, and the cops understand that. If fewer people came to Vegas, there'd be less work for cops.
Once, I was sitting at a hotel bar, and a hooker sat down next to me and tried to drum up some business. I declined, but she stayed and chatted for a while. She claimed that the hotels let them ply their trade on certain nights of the week. (I think she said Mondays.) I don't know if that's true (I also don't know why she would lie), but it makes sense. I think there's a general live-and-let-live attitude. "We won't bust you if you promise to limit the behavior."
That said, though Vegas is known for being Sin City, I think this is status quo in a lot of places. When I lived in London, I saw street walkers every night. They were totally obvious, and no one was arresting them. Here in NYC, until fairly recently, you'd see the same thing if you walked down 8th Avenue near Times Square. Generally, unless there's a specific anti-vice campaign going on, the cops have better things to do than bust Johns and hookers.
posted by grumblebee at 12:46 PM on October 19, 2010
Sadly for me (because I'm not fond of the place), I go to Vegas every years for work. I'd say prostitution is illegal there the way pot is illegal in many places. It's tolerated as long as no one jumps up and down and yells, "I NEED A HOOKER!" or "HEY, I'M A HOOKER!"
Although...
Once I was in a major strip hotel, walking to get some pizza by the casino. A woman walked by me and seemed to work hard to catch my eye. Whatever. I kept walking. On the way back, with my slice, she came walking towards me again and said -- loudly -- "Hey! You want a HOOKER? Because that's what I DO!" She seemed totally unworried about being caught. (She didn't seem like she was drunk or on drugs -- just an aggressive business woman.) And, honestly, if you hang around in many of the casinos starting at 10pm or so, it's pretty easy to spot the working girls. If law enforcement really wanted to stop them, they could.
But the hotels want business, and the cops understand that. If fewer people came to Vegas, there'd be less work for cops.
Once, I was sitting at a hotel bar, and a hooker sat down next to me and tried to drum up some business. I declined, but she stayed and chatted for a while. She claimed that the hotels let them ply their trade on certain nights of the week. (I think she said Mondays.) I don't know if that's true (I also don't know why she would lie), but it makes sense. I think there's a general live-and-let-live attitude. "We won't bust you if you promise to limit the behavior."
That said, though Vegas is known for being Sin City, I think this is status quo in a lot of places. When I lived in London, I saw street walkers every night. They were totally obvious, and no one was arresting them. Here in NYC, until fairly recently, you'd see the same thing if you walked down 8th Avenue near Times Square. Generally, unless there's a specific anti-vice campaign going on, the cops have better things to do than bust Johns and hookers.
posted by grumblebee at 12:46 PM on October 19, 2010
Via my own research (on Google, I swear), it looks like a hooker will run you $300 to $500 bucks
I haven't been to Vegas since '87 but my brother goes every year and has sent me some of these cards. "$35" is often quoted on them, but exactly what is provided for that isn't indicated.
posted by Rash at 3:39 PM on October 19, 2010
I haven't been to Vegas since '87 but my brother goes every year and has sent me some of these cards. "$35" is often quoted on them, but exactly what is provided for that isn't indicated.
posted by Rash at 3:39 PM on October 19, 2010
I don't know anything about prostitution but near where I live there are people being paid $20 an hour to stand around and hand out flyers for a ... pancake shop.
If a frigging pancake place can pay that you better believe a prostitution place can pay that too. And that silly pancake shop doesn't even have any competitors... or at least, any competitors that I know of (hmm maybe it's working)
(Australian dollars, though, but that's pretty damn near to parity with the US right now)
(Now I want pancakes. Damn it.)
The real answer is somewhat more complicated than the simplistic "if it didn't make a profit they wouldn't do it". Immediate profit is rarely the main driver of business decisions anyway. If a pancake place fills 50% of its capacity and makes a profit of $2000 a day, they may actually prefer to spend a heap on advertising and fill 85% of capacity and make a profit of only $1500 a day.... for wide variety of reasons. Bigger customer base ensures more stability in revenue... larger volumes means more power (bargaining power, etc) ... larger staff widens experience pool availabe...
posted by xdvesper at 3:40 PM on October 19, 2010
If a frigging pancake place can pay that you better believe a prostitution place can pay that too. And that silly pancake shop doesn't even have any competitors... or at least, any competitors that I know of (hmm maybe it's working)
(Australian dollars, though, but that's pretty damn near to parity with the US right now)
(Now I want pancakes. Damn it.)
The real answer is somewhat more complicated than the simplistic "if it didn't make a profit they wouldn't do it". Immediate profit is rarely the main driver of business decisions anyway. If a pancake place fills 50% of its capacity and makes a profit of $2000 a day, they may actually prefer to spend a heap on advertising and fill 85% of capacity and make a profit of only $1500 a day.... for wide variety of reasons. Bigger customer base ensures more stability in revenue... larger volumes means more power (bargaining power, etc) ... larger staff widens experience pool availabe...
posted by xdvesper at 3:40 PM on October 19, 2010
not to threadjack on this (much), but re: foursentences point c. There are lots of hidden expenses, including but not limited to: premiums on in-call locations (maybe you mean outcall?), police bribery, retainer fees, paying drivers / protection, personal beautification (hair, nails, makeup, surgery), clothing, etc. More expensive than it looks :)
posted by gregglind at 4:21 PM on October 19, 2010
posted by gregglind at 4:21 PM on October 19, 2010
Non-Vegas, non-hooker, but related: Outside any decent sized train station in Japan, there will be people handing out tissue packet with advertisements inside. The ads are for any number of things, gyms, payday-esque loan companies, bars and restaurants near the station, karaoke, contact lenses, whatever. They pay pretty poorly, and the person has to hand out every single tissue packet before their shift is over, but for a lot of young people, it's not a bad gig, since they don't need any special skills, don't have to do it every day, and the hours are pretty flexible (usually they're there either during the morning rush hour or the evening). Most people take the tissues because, hey, free tissues.
The bottom line: if the companies didn't get a return on the ad costs, they wouldn't do it. Same holds true just about everywhere.
posted by Ghidorah at 6:28 PM on October 19, 2010
The bottom line: if the companies didn't get a return on the ad costs, they wouldn't do it. Same holds true just about everywhere.
posted by Ghidorah at 6:28 PM on October 19, 2010
This thread is closed to new comments.
Simply put, if it wasn't profitable they wouldn't do it (for long). As far as your other questions, I have only speculation: I imagine they get paid by the job, and the cards don't cost that much. If you're selling an illegal product that is somewhat morally illicit, it can be difficult to get into traditional ads. And it's way cheaper to just go to the customers directly, and you're not buried on page 16.
posted by RikiTikiTavi at 9:03 AM on October 19, 2010 [2 favorites]