Mr Key said it was an operational issue for Tourism NZ, but he assumed it was worthwhile having a PR company on retainer.
"In the US market you need PR companies."
Tourism NZ chief executive Kevin Bowler estimated the payment for work done on the Letterman Show at $5000 to $10,000 - about one-third of the PR company's work that month. There was no appearance fee paid to the Letterman Show and he considered the PR bill "extraordinary" value for money.
"It was worth multiples of that. If you were to buy an ad spot in that programme, you'd be paying for 30 seconds.
"We got 10 minutes of our Prime Minister talking about New Zealand on prime television watched by millions, plus all the YouTube hits it generated. It was one of the best value things we've done in the last couple of years."
It's also been revealed that Letterman was given a taster of Mr Key nine months before the appearance - in January of 2009 Mr Key wrote to invite David Letterman to visit New Zealand, including his own video of "top 10 reasons why David Letterman should visit New Zealand".
Mr Key said yesterday he recalled making a video but was unsure what happened to it. The letter from Mr Key, released by his office later, reveals the video was prompted by Nicole Kidman mentioning New Zealand on the show.
A Tourism NZ spokesman said Mr Key's own trip to the US was not confirmed at that point and efforts to secure his appearance on Letterman had begun some months later.
Mr Bowler defended the decision to contract a fulltime public relations company in the US, rather than use its own marketing department.
He said while there were smaller countries where an in-house team was suitable, in big markets - particularly the US - the "muscle" of a good public relations company was required.
