OWN Charter Sponsors Renew Deals in Upfront

Winfrey's ratings upturn buoys advertiser interest

By Jon Lafayette -- Broadcasting & Cable, 6/29/2012 11:13:04 AM

Improved ratings have come at the right time for Oprah Winfrey's struggling OWN Network, which was able to get the eight advertisers who signed two-year deals as launch partners to renew their sponsorships during recently concluded upfront negotiations.

Sticking by Winfrey and her nearly two-year-old cable channel are Procter &  Gamble, General Motors, Target, Toyota, Nissan, Wal-Mart, Kellogg and Kohl's, according to Kathy Kayse, executive VP for ad sales at OWN, a joint venture of Winfrey and Discovery Communications.

Since its ballyhooed launch, OWN's ratings have been disappointing. Discovery has poured $300 million into the project so far. It racked up almost $50 million in losses in the first quarter, writing off failed OWN programming including a Rosie O'Donnell talk show.

But ratings rose for the second consecutive quarter in the second quarter, with double gains among women 25-54 in both primetime and total day. Oprah's Next Chapter aired the second part of her interview with the Kardashian family on June 24, winning the time period among female viewers.

"This momentum is coming at a critical time as advertisers continue to place their bets on the network," said Kayse, who said OWN had wrapped nearly all of its upfront business. Dollar volume was up from last year's upfront and while she wouldn't disclose whether prices on a cost-per-thousand (CPM) basis were up or down, Kayse said Winfrey maintains the kind of premium pricing she commanded when the network was launched.

Kayse said that most of the original advertisers thought that OWN's ratings goals were a little lofty, but their deals were linked to top-tier programming and programming that featured Winfrey herself and to vignettes and other unique sponsorships.

The sponsorships were also pricey, with P&G reportedly committing $100 million to OWN and others pledging $10 million to $15 million, a large sum for a startup.

When viewership came in lower than promised, "we did them right in terms of how we worked with them through the challenges we had with ratings. We helped them right-size the business," Kayse said. "They've always look at it as a long-term proposition and investing in the future with us."

Two other charter advertisers, Johnson & Johnson and JPMorgan Chase, dropped their sponsorships after their one-year deals expired.

In addition to the charter sponsors, Kayse said OWN is attracting more advertisers in additional categories, though the retail category has remained particularly strong.

Kayse says advertisers are attracted by the way Winfrey's multi-platform presence, which has made her Lifeclass show popular.

"It may not be the ratings story that you find with Next Chapter," she says, but "what's really attracting a lot of advertisers to Oprah's Lifeclass is the whole notion of our cross-platform success on Facebook, with Oprah's Twitter fees and the audience she's able to command on a global basis. That's been an extremely well received story in the market."