CNN Sees Gold in Political Ads

Oct 20, 2003  •  Post A Comment

CNN has declared itself a frontrunner in pursuing election year cash even though it trails rival Fox News Channel in the ratings.
The Time Warner-owned cable network expects to raise a whopping $30 million in ad revenue through 2004 political coverage sponsorship sales. Sponsorships will be visible on CNN programming throughout the debates, national nominating conventions and on Election Day.
One major sponsor, Chrysler Corp., already has signed up, according to Greg D’Alba, executive VP and chief operating officer of CNN Advertising Sales and Marketing
Mr. D’Alba wants to sell a limited number of sponsorships-between four and six-to major advertisers. He expects to have 75 percent of those slots filled by the end of the fourth quarter. He said there’s been interest from advertisers in a broad range of categories, including financial services and communications.
The $30 million would mark a “dramatic” increase over the election coverage revenue CNN generated in 2000, he said.
Mr. D’Alba declined to say how much individual sponsorship packages cost, but six sponsors, each paying $5 million, would generate $30 million. Some of the packages may be broken into smaller bits, and full sponsors enjoy category exclusivity, said Mr. D’Alba, who declined to say whether Chrysler took a full sponsorship.
The packages encompass CNN’s regular political programming, including its top-rated “Larry King Live,” a regular stop on the campaign trail for candidates. The packages also extend to CNN’s other platforms, including its online operation, airport channel and print partnerships They also include marketing and merchandising support. For some clients, CNN will arrange and cater briefings at the conventions, during which on-air talent, such as Judy Woodruff, would speak. With the conventions being held in New York and Boston, there’s “an ease of marketing and an ease of entertainment,” Mr. D’Alba said.
“This is our Super Bowl,” Mr. D’Alba said, explaining why the network is pulling out all the stops. Those value-added extras also get CNN away from the business of competing with Fox News over the relatively simple arithmetic of ratings points and CPMs.
“Not all ratings points are created equal,” said Mr. D’Alba, repeating a CNN ad sales mantra that contends that while Fox News has higher ratings, CNN has more reach, more exclusive viewers and more affluent viewers.
And ad buyers’ habits die hard. While buyers say CNN has been forced to moderate prices as its ratings have fallen and the competition stiffened, it still pulls in more revenue than Fox News. Industry sources estimate that CNN will generate more than $500 million in ad sales in 2003. That includes revenues from CNN Headline News, usually sold as a package with CNN. Fox’s ad revenues are estimated at about $300 million, up sharply from $90 million in 2002, but still far behind the more established CNN.
Fox News declined to discuss election coverage ad sales plans.
To highlight its election year plans, CNN this week will invite about 150 ad buyers to the Waldorf-Astoria hotel in New York. “It’s a key event. We’ll profile what we do and showcase our talent for the ad community,” Mr. D’Alba said. The event will feature the four hosts of “Crossfire” debating for the live audience.
Mr. D’Alba said the event will underscore that advertisers can be associated with “coverage only CNN is capable of.” And while crediting Fox News with helping to pull more viewers away from broadcast to cable news, D’Alba says his rival produces a different product. “Fox has done a good job telling people what they want to hear.”
But he said that his goal is not to try to take ad dollars away from Fox News. He sees the $1.2 billion spent on broadcast news shows as a much more attractive target.
Mr. D’Alba added that another reason election coverage is attractive to advertisers is that it is almost impossible to preempt. Even in the event of a war, it’s almost certain the election will be held as scheduled.