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CNN Plans to Sell Headline on Its Own

Apr 4, 2005  •  Post A Comment

As the upfront approaches, CNN is changing the way it sells its Headline News service, which has been on a ratings tear in recent weeks.

Headline News has traditionally been sold packaged with CNN, but with Headline’s new prime-time programming showing huge viewership gains, it may generate demand of its own. As a result, more often. “The marketplace is feeling good about what we’re doing,” said Greg D’Alba, chief operating officer for CNN Ad Sales and Marketing. “One thing that’s for sure is that it can stand alone now.”

In addition, the network used to be sold by daypart, but now is offering a program rotation-a spot on each of the prime-time shows for their multiple runs.

Headline News’ new prime-time shows, fueled largely by the success of “Nancy Grace,” have generated ratings some 60 percent higher year to year than the news wheel programming the shows replaced in mid-February, according to Nielsen Media Research.

“Showbiz Tonight” kicks off the block at 7 p.m. (ET), “Grace” follows at 8 p.m. and “Prime News Tonight” airs at 9 p.m.

About 70 percent of CNN’s ad sales are for a combination of CNN and Headline News. Most of the rest has come from advertisers who wanted CNN only, but, “We’ve had advertisers that want to skew a little bit younger that will buy Headline News separately,” he said.

And if more advertisers now want to buy Headline News, Mr. D’Alba said, he expects it will mean incremental revenue for CNN News Group.

Rather than shifting money from CNN to buy Headline, “I see it more at the expense probably of an MSNBC and a CNBC,” he said. “And I think that’s what you’re seeing. If you look at the audience gain for this network in prime time, it’s not at the expense of CNN, because CNN is growing.”

A big part of CNN’s sales pitch is multiplatform and integrated packages, and Mr. D’Alba said he expects to begin to do that on the new Headline News prime-time shows: “I guarantee that as we get through the upfront, our strategic integration group will be creating opportunities for advertisers for sponsorship position within `Nancy Grace’ and even `Prime News’ on Headline.”

Based on CNN’s experience with a former entertainment show, Headline News’ “Showbiz Tonight” is likely to be popular with the studios.

Emphasis on Elusive

CNN has long included the viewership and reach of CNN Headline-as well as its online and international channels-as part of its upfront pitch. This year, partly to offset Fox News Channel’s big lead in overall ratings, CNN’s presentation to advertisers will emphasize the way it reaches elusive, influential, upscale viewers and its ability to create integrated, multiplatform marketing packages.

CNN will make presentations to individual agencies and clients over the next few weeks. In particular, CNN is pitching its ability to reach what Roper Center calls “the influentials.”

“Who are the influentials? The 10 percent of the public who really tell the other 90 percent what to do, what to buy, how to vote,” said Gregg Liebman, VP of CNN Ad Sales Research.

“They tend to be socially and politically active and they actively seek out information. They’re news junkies. They have an insatiable need to know what’s going on,” he said. “And because they’re a wealth of information, others who just don’t have that same inclination seek guidance from these people.”

According to a Roper study conducted in February, CNN News Group, with all of its platforms, reached 85 percent of these “influentials” during the month, with 74 percent of them watching on TV, 31 percent on CNN.com and 29 percent watching out-of-home. They watch CNN because they value its type of journalism, Mr. Liebman said. Polled by Roper about which TV news source provided the best quality news coverage, 25 percent said CNN, 19 percent said Fox News Channel, 15 percent said NBC, 12 percent said ABC, 7 percent said CBS, 4 percent said MSNBC and 1 percent said CNBC.

“They’re not seeking opinion and discussion, they’re seeking information, and CNN provides that for them,” Mr. Liebman said.

CNN also conducted what it believes might be the first study of media usage by “C-suite” executives: the CEOs, chief operating officers, chief financial officers and so on of Fortune 1,000 companies.

In a study conducted by Monroe Mendelsohn Research from November 2004 through February 2005, the 170 respondents had a median age of 51.7, a median income of $434,600 and a median net worth of $2.5 million.

“C-suite execs, no surprise, are light TV viewers, they tend to be heavier magazine newspaper and Internet users,” Mr. Liebman said. “Their primary genre is news. As executives they need to be informed about what’s going on, and they regularly watch CNN. CNN is their choice for that information.”

In the survey 61 percent said they regularly or occasionally watch CNN, compared with 51 percent for NBC, 49 percent for Fox News Channel and 47 percent for Headline News.”

He added that “it’s also interesting to see how well Headline News performs with these executives. They’re so time-crunched, Headline News provides a really valuable insight into what’s happening in the world in a very quick, easy-to-digest form.”

To reach this elusive audience, CNN’s multiple platforms surround it with multiple platforms and integrated campaigns, which the network calls CNN360%BA;. A year ago CNN put together a strategic integration group that serves as an in-house agency, creating marketing programs the network can sell to advertisers. The integration group understands the client objectives and tailors solutions with the various platforms to meet those objectives. “It’s less about what we have to sell and more about what the client is looking to achieve,” Mr. D’Alba said.

Mr. D’Alba said he’s expecting a “tremendous” upfront. Last year CNN’s revenue rose about 30 percent in the upfront. Since then the scatter market for news has been hot, he said. That augurs well for 2005-06. “We’re expecting double-digit increase in revenue,” he said.

Prices will rise as well, but those increases will be “fair,” he said. “The reason why we have that share advantage is because we do create win-win situations. We’ve been fair to the marketplace, and the marketplace has been fair to us.”