In Depth

Why Advertisers Are Sticking With OWN Despite Early Disappointment -- P&G, Walmart Among Those to Re-Up

By Andrew Hampp
Advertising Age

Oprah Winfrey's move to take the reins as CEO of the Oprah Winfrey Network marked the latest in a long series of executive shifts and shuffles. But it also instilled perhaps the first sign of confidence many media buyers and marketers have had in the fledgling cable network, a joint venture of Discovery Communications and Harpo Productions, since its January launch.

The network's first-quarter performance ranked No. 45 among cable networks in prime time for total viewers and adults 18 to 49, according to Nielsen Media Research. Its second-quarter performance was worse, placing 63rd for total viewers and 73rd for adults 18 to 49. That made OWN last among women's cable networks, which include Lifetime (No. 28 for total viewers), Oxygen (No. 35), We (No. 45) and even ABC's soon-to-be-canceled SoapNet (No. 58.)

The poor showing has miffed and disappointed many media buyers, particularly those such as Kohl's, General Motors, Walmart and Kellogg that shelled out $10 million to $20 million each to be a launch partner. Procter & Gamble committed $100 million across its brand portfolio to secure premium ad time on the network.

"Everyone involved from the people at OWN from the buying community to the clients hoped she cold catch lighting in a bottle in Year One and magically come out of the gate and turn into a top 10 network against women," said one major media buyer. "The Oprah Factor is always such a wild card. You believe that it's possible to turn everything she touches into a success, but it didn't quite work out that way."

"There was a lot of hope for the network because of the types of content coming in to the market -- content that would resonate with a lot of our clients," said Stacey Shepatin, senior VP-director of national broadcast for Boston-based agency Hill Holiday. "Unfortunately the programming has been very slow to roll out and is really just not delivering what we wanted it to."

Buyers haven't given up on OWN. The network is now finishing upfront negotiations for ad time in the coming fall season, re-upping deals with many of its launch sponsors while adding new advertisers from categories such as home improvement, retail and movie studios. But OWN scaled back its ratings expectations this time around, several media buyers told Ad Age, after the failure to meet last year's guarantees required the network to offer make-goods of additional ad time.

"They're not getting the premiums that the Viacoms, Scripps and so forth were getting," said one media buyer.

Kathleen Kayse, OWN's exec VP-ad sales, said the network is encouraged by the reinvestment from its initial top sponsors. "I think our buyers were somewhat realistic in approaching the marketplace, understanding that the first year we were a bit aggressive in our ratings expectations," she said. "There was surprise and disappointment, so there were some new expectations applied when they were putting their plans together [this year.]"

Ms. Kayse expects the recent finale of Oprah's daytime talk show coupled with the looming departure of daytime soaps such as "All My Children" and "One Life To Live" to bring some new female marketing dollars to cable, particularly from longtime "Oprah Winfrey Show" sponsors like Target that have already been advertising on OWN. And Oct. 10 brings the debut of OWN's daytime talk show "Rosie," ad time for which will mostly be sold after production begins in early fall. Ms. Kayse expects host Rosie O'Donnell to be as advertiser-friendly as she was in her late-'90s daytime heyday. "As typical of Rosie, there will be a lot of opportunities for advertisers to be integrated into the show -- particularly when she believes in the brand," she said.

Ms. Winfrey is also expected to have a more hands-on role with advertisers as she takes the CEO reins. "We just had a meeting a month ago, and she was very interested in how advertisers were looking at the network," Ms. Kayse said. "It's not a place where she spent historically a lot of time, so now that she's CEO my expectation is that will hopefully amplify for us."