FNC Gambit: Less Is More

Jun 6, 2005  •  Post A Comment

Fox News Channel is betting that having fewer commercials will make it more popular with advertisers.

As part of its upfront presentation, the top-rated news network is telling buyers their ad dollars work harder at Fox News because more of its viewers stay tuned through commercial breaks than on other cable networks.

Those viewers also tend to be more upscale and influential than is commonly believed, said Paul Rittenberg, senior VP of national ad sales.

“We think our audience is worth a higher [cost per thousand] because of size but also because the advertiser is getting more bang for the buck,” he said.

Still, so far the upfront is off to a slow start for Fox News, as it is for most cable channels. At this point, Mr. Rittenberg is projecting a 20 percent increase in revenue for Fox News Channel in an overall news market that he sees as largely flat, with broadcasters down and cable up.

Mr. Rittenberg said that Fox News is an attractive advertising environment because “We have less commercial time and a more attentive audience.”

An analysis by ad buying firm MindShare of data from TNS Media Intelligence shows that commercial time in 2004 on Fox News dropped to 9 minutes and 41 seconds per hour in prime time compared with 9:26 in 2003, making it one of the least cluttered cable channels. (CNN’s commercial minutes rose to 9:56 from 9:11, according to the TNS data.)

“There are some lengthy breaks out there,” Mr. Rittenberg said. “And I understand it. When I was at ABC in the ’80s, we were adding time as fast as we could without telling anybody. But at a certain point there’s a law of diminishing returns on that stuff.”

At the same time, Mr. Rittenberg pointed to data that shows Fox News averages 4.67 commercials per pod, the lowest of the top 10-rated cable networks. (CNN averaged 4.91 units per pod.) More important, Fox News runs a promo for itself only 7 percent of the time as the first spot in the pod-known as the “A” position-also the lowest of any of the top-10-rated cable networks. (That’s the spot viewers are most likely to see, and some cable networks take more than half of those valuable spots for their own promotions.)

That’s important to advertisers but often gets lost in the shuffle during negotiations. “We’ll spend weeks arguing about a 1 percent or a half-percent CPM increase, but they buy entertainment networks that run a promo in the ‘A’ position in every break,” Mr. Rittenberg said. “The advertisers are arguing about the wrong thing.”

Mr. Rittenberg said he tends to turn make-good spots back to programming when ratings are good, especially in daytime, when the channel’s programming is live. “I’m not going to sell it to the nose-tweezers guy, and the producers are always thrilled to set a couple of minutes an hour back,” he said.

Unlike many other cable networks, Fox News does not sell branded news segments, further holding down the clutter.

Keeping the Pace

Fox News producers also work to ensure that viewers stay over the commercial breaks.

“Our goal is to make the programming so interesting and compelling that it’s hard for them to tune out, even when there’s a commercial,” said Bill Shine, senior VP of programming at Fox News Channel.

“We have what we think is very good teasing-giving the audience indication as to what’s coming up next-and we write very tight to the breaks,” he said. “If you notice, some networks will do before they go to break a 10- or 15-second bump shot of the control room or people walking around the set or the weather outside, and we try not to do that. We try to keep the pace moving because we’re using people’s time, and people’s time is valuable. So they tune in to us for information, and we’re not giving them information if you’re looking at a bunch of producers sitting around talking at a desk.”

Fox News shows will tease compelling video and deliver a payoff, showing the video and telling viewers all about it, he said. “If you watch ‘The Fox Report,’ you’re not going to hear, ‘We’ll be right back.’ ‘We’ll be right back’ is not a tease. If you want to annoy your ad sales guys, tease out with ‘We’ll be right back,’ because that doesn’t say anything and you’re not showing anything.”

That mind-set explains why Fox News viewers stay tuned to the channel for 25.4 minutes on average, one of the highest on cable, he said. (CNN viewers stay for 19.1 minutes on average.)

A good chunk of those viewers are what are called “the influentials,” people who tell other people how to vote, where to eat and what to buy, according to Knowledge Networks/SRI data. Those people do things like write to politicians, serve as officers in local organizations and make speeches.

“An influential is a guy with a big mouth,” said Mr. Rittenberg, putting the notion into simpler terms: “I’ve got this new hybrid car and you should check it out.”

Former NBC research chief Nick Schiavone is a consultant with Fox News and has used surveys by Knowledge Networks/ SRI to track brand resonance with these influential viewers. According to a fall 2004 survey, Fox scored a 7.0 (on a scale of 10) in brand resonance with influential viewers, the highest of any news network. Those viewers also pay more attention and

are more inclined to purchase when they see something on Fox News.

“There’s a halo effect. If a Lexus ad runs on the Fox News Channel, then Fox News viewers will think, maybe I will try a Lexus. There’s a little more to it than just running a spot anywhere,” Mr. Rittenberg said. “It is very difficult to quantify that, but thanks to Nick we’re getting pretty close to being able to do it.”

CPMs in news will be up by single digits, he predicted. “Since we haven’t written anything yet, I can’t tell you what it is. But we’re going to be user-friendly, as we almost always are,” he said.

Fox News would like to take some money from the broadcast networks in the morning. “There’s a lot of money there. That’s still a very hot daypart. On a good day ‘Fox and Friends’ will do over a 1 rating. That’s not that different from the CBS show [‘The Early Show’] to begin with,” he said. “‘Today’ and ‘GMA’ are very high cost per thousands relative to the value. If we can peel $20 [million] or $25 million away from ‘Today’ and ‘GMA’ and put it in ‘Fox and Friends’-and I think we have a very good media case for doing that-then that would be very good.”

He also sees money coming from CNBC and MSNBC. With its ratings off 30 percent, Discovery Networks’ TLC offers another opportunity. “That’s a fair amount of upscale money that’s going to be looking for a home,” he said.

Fox News Channel now has more than 400 national advertisers, up about 15 percent from the previous season. “There may be a few left in the news area who don’t buy us, but I frankly don’t know who they are,” Mr. Rittenberg said. “We are unlikely to ever write much business from McDonald’s or Coke. We’re just not going to get 18 to 34 stuff unless there’s a very specific reason for it.”

But he would like to be bigger with the movie studios. “My personal goal, which I have not yet succeeded in, is to convince a movie studio to buy a Thursday night position in ‘O’Reilly’ for 52 weeks a year, because it is water-cooler programming,” he said. “It can be difficult to convince people who live in New York and L.A. of that, but it is.”