The Katie Couric Factor
Media buyers rate the value of Dan Rather's anchor replacements in ratings and ad dollars
By Joe Mandese -- Broadcasting & Cable, 1/23/2005 7:00:00 PM
No wonder CBS Chairman Les Moonves is interested in Katie Couric. With Dan Rather exiting the CBS Evening News amid a nasty controversy, Couric is the best bet to restore order—and ratings (see B&C, 12/20/04, page 3)—even if Moonves has to wait 16 months until her NBC contract expires.
| Anchor value | ||
|---|---|---|
| Potential effect of Dan Rather's replacement on the CBS Evening News' ratings and advertising dollars | ||
| Rating Change* | First Year's Yield (million) | |
| *From 2004 rating performance SOURCE: B&C poll of agency network buyers and media research executives, who were asked what the impact each news anchor candidate would have their first year on the ratings of CBS Evening News |
||
| Katie Couric | +0.70 | +$23.1 |
| Multiple anchors | +0.20 | +$6.6 |
| Ted Koppel | +0.15 | +$5.0 |
| Anderson Cooper | +0.05 | +$1.7 |
| Bob Schieffer | 0 | 0 |
| Jon Stewart | -0.05 | -$1.7 |
| Harry Smith | -0.20 | -$6.6 |
| John Roberts | -0.25 | -$8.25 |
| Bill O'Reilly | -0.35 | -$11.6 |
| Mika Brzezinski | -0.55 | -$18.2 |
| Scott Pelley | -0.60 | -$19.8 |
Couric has been called the $100 million woman, a reference to the rumored value, after incentives, of her five-year contract with NBC. But the buzz on Madison Avenue is that she is worth even more to CBS.
Several top media buyers say Couric could boost ratings enough to generate more than $100 million in incremental ad revenues over the next five years, making her the most lucrative candidate to helm the nightly newscast. One big reason is her draw with younger demos, a major ad lure.
While Couric's actual impact on ratings, audience share and ad spending is debatable, there is much speculation about what the nation's leading anchors would bring to CBS' table. Buyers estimate that Couric would raise the average rating of Evening News by 0.7 point per year over the 5.2 rating that Dan Rather averaged during 2004. (On an annual basis, each Evening News rating point is worth about $33 million to CBS, according to a B&C analysis of Nielsen estimates.)
Youthful audience
“CBS has a rich heritage in the evening news: Edward R. Murrow, Walter Cronkite, Dan Rather. They need someone who will at least maintain that, and Katie Couric is one of the few who could,” says Brad Adgate, senior VP, corporate research, at Horizon Media, New York.
Steve Sternberg, senior VP of audience analysis at Magna Global USA, believes Couric is capable of stealing viewers from ABC and NBC, too, and could help the network attract a younger audience.
The next most lucrative move CBS could make would be the multiple-anchor team approach that Moonves proposed last week at the Television Critics Association (TCA) winter tour. Without tapping specific anchors or knowing how the newscast would be structured, the concept was projected to generate an average 0.2-rating-point boost, translating to an additional $6.6 million in annual ad dollars for CBS News, according to media buyers polled.
The only other anchor name that could approach such numbers is ABC's Nightline's Ted Koppel. Agency execs expected the seasoned news pro would up the Evening News quotient by 0.15 point, a yearly ad gain of about $5 million. Reaction is mixed on CNN's Anderson Cooper, although ad insiders believe he'd register a marginal rating and revenue increase. CBS vet Bob Schieffer would maintain current ratings levels.
The worst-case scenario, from Madison Avenue's viewpoint, would be to elevate a CBS News correspondent, such as the two names that have been bandied about, Mika Brzezinski and Scott Pelley, which would erode the newscasts' average rating by more than half a point, costing CBS News nearly $20 million in annual ad revenues.
Another big concern is the toll the transition will take. Couric might stem a ratings or audience drop, but she's tied up at NBC till mid 2006. NBC planned a long, orderly transition from Tom Brokaw to Brian Williams, and the audience was prepared for change. As a result, the the network experienced little adverse impact, so far.
CBS might not be so lucky, predicts Leo Kivijarv, vice president of Stamford, Conn.-based PQ Media, a media-research firm. “Katie Couric's name has come up because they need a big bang for their bucks,” he says. “The caveat is that NBC has more attractive demos for their network in general, and for news in particular, than CBS.”
And if Couric did attract younger viewers to the evening newscast, it would make the composition of CBS' audience more valuable to advertisers, especially those in categories that don't normally buy time on the evening news. The viewers of CBS' evening newscasts are the oldest of any daypart (median age 60), limiting the appeal to marketers that target younger consumers. Evening News is littered with spots for products aimed at older people—categories like over-the-counter analgesics or prescription-drug brands—which fetch far lower ad rates than shows aimed at younger viewers.
Coming from behind
The average 30-second spot on the CBS Evening News runs about $30,000, according to estimates from Nielsen Monitor-Plus. That sum is considerably less than the $39,000 ABC World News Tonight and the $42,000 NBC Nightly News command. (All the evening newscasts get far lower ad rates than other dayparts, due to viewer demos.)
The audience median age for early-morning newscasts is about 52, eight years younger than that for the evening news, per Magna Global. The median age of NBC's Today show, co-anchored by Couric, is 50.9.
But even with Couric's plusses, any dramatic shift in the personalities, style and production of Evening News carries risks. The upside for CBS—attracting more, younger viewers—may disenfranchise its existing base of loyal viewers, leading to a net loss in ratings and ad dollars. “The audience for network evening news is older people looking for comfort and stability around dinner time,” says Ray Warren, managing director of OMD, New York. “Anybody new coming in would be untested, and no one knows how that plays out.”
But the guy at the top of CBS thinks it's time for a change. “The good thing about being in third place is that we can try something different,” Moonves told reporters at TCA.
The counter-programming option
Ed Papazian, president of Media Dynamics, New York, a consultancy to advertisers, says Moonves and company should be willing to shake things up in a big way.
“The smartest thing CBS could do would be to counter-program. If they were to put on an ESPN-style sports-news show or an Access Hollywood-type celebrity-news show,” says Papazian, “they'd attract younger viewers and different kinds of sponsors. But there is no way. They'd have to kill the news president to do that.”
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