As president of sales and marketing for CNN and Headline News, Larry Goodman is the point man in presenting the two channels to the advertising community.
Although advertisers can buy the networks separately, more than 75 percent of ad sales result from “combo” deals in which the two channels are packaged as one, with commercials running on both.
Electronic Media: How is the advertising market shaping up for CNN and Headline News for 2003?
Larry Goodman: Very well. We saw a good 20 percent growth in the broadcast upfront, and our calendar upfront looks like it’s going to duplicate that. We were up in the high single digits on the revenue side this year, and we think we’re in good shape to see double digits next year.
EM: How about costs-per-thousand?
Mr. Goodman: Fairly flat for the upfront year-over-year, but for the first quarter of the broadcast year, which is fourth [calendar] quarter, we were up about 18 percent, scatter vs. upfront.
EM: CNN and the other Turner networks have led the fight to attain parity of ad dollars for cable against broadcast. How is that working out?
Mr. Goodman: We are seeing some shifts occur, but it’s not been as pronounced as we had hoped. We do plan to bring some new tools to that battle fairly soon.
EM: How has the recent reformatting of Headline News benefited ad sales?
Mr. Goodman: Mostly through demographic and perception shifts. We have seen a higher proportion of our total revenue being delivered through the 18-to-49 [-year-old] buying criteria, so we are looking to compete in an expanding range of demographics, particularly the 18-to-49 age group, which is where most of our growth has occurred in the past year.
EM: How do you see ad sales changing for Headline News in the future? More sponsorships? Different advertiser categories?
Mr. Goodman: The key thing will be to keep cultivating the 18-to-49 account base and to develop some categories that have historically not been heavy news categories, because news has historically skewed older.
Headline News is the youngest-skewing news network, and it enjoys a unique niche. We need to keep emphasizing that niche and let our advertisers know that Headline News is reaching a demographic that historically news has not been able to deliver.
EM: Given the widely publicized problems at parent company AOL Time Warner, how much pressure is there to boost ad sales at the news networks?
Mr. Goodman: We have had a great year, a terrific year. We have grown at a higher rate than what Nielsen or [Competitive Media Reports] reports for overall cable. Given the strength in our upfront market, which is roughly a 20 percent year-over-year increase, we are optimistic that we will continue to deliver the bottom line that the company wants.
EM: CNN and its competitors have complained for a long time that the current Nielsen methodology fails to account for a good part of the news audience. How do you get over that hump?
Mr. Goodman: I think our total audience is 10 to 15 percent bigger than what gets reported, and it would be great to be able to sell those extra rating points. We talk about the viewing we have on Wall Street, in [Washington] D.C., in hotels, in bars and airports, you name it.
We are working with Nielsen on a more extensive out-of-home analysis, but there is still a reluctance on the part of buyers to work that into their buying criteria.
If Nielsen changes its methodology at some point and actually builds into the baseline ratings out-of-home viewership, it changes everything for the industry. If that doesn’t happen, it will be tough for any organization or any network to have agencies accept the out-of-home measurement.
EM: You have been quoted as saying that broadcast news is dying. Do you stick by that opinion?
Mr. Goodman: Yeah, I am sticking by it even more now. The big shift came a couple of years ago when you had 60 percent of the [news] rating points delivered by broadcast, and 40 percent by cable. Last year it was the exact opposite, and when 2002 is all totaled up, I think you will see a continuing migration, and I predict that cable will control two-thirds of the rating points for 2002.
The key thing is that the economic model for broadcast news cannot really sustain itself. The broadcast news guys had to piggyback [ad buys] with prime time this year to even get bought, so it’s a rapidly changing model. It’s just not sustainable.
Cable news, particularly CNN and Headline News, has a male, upscale profile. Broadcast news has a female, downscale profile. The cable news audience looks a lot like what you would expect from a sporting event. Broadcast news looks a lot like what you would expect from a soap opera.
The broadcast audience you can reach just about anywhere. Old, female and downscale just isn’t going to cut it.