Why No One Wants to Advertise on Oprah's New Channel -- Yet

Last Updated Jan 20, 2011 3:07 PM EST

About 75 percent of ad buyers have no current plans to buy time on Oprah Winfrey's new cable TV network OWN, according to a Deutsche Bank survey. Twenty-five percent of buyers are waiting until Winfrey's own show starts in the fall.

The "tepid" reaction of the ad world to OWN, as Deutsche Bank analyst Matt Chesler described it, shows the limits to branding in the TV world. Even when you can get TV's biggest horse to water, you can't make it drink until the audience is there.

The survey asked 31 media buyers who control $5 billion in ad spending about their plans to buy advertising on OWN:

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When Winfrey unveiled her plans to start a new cable network she did so with a splash: Procter & Gamble (PG) pledged to spend $100 million on ads within its shows. The channel is hobbled, however, by the fact that it will not carry a daily show with Winfrey herself. Her show will appear only twice a week in late 2011. Currently, the OWN schedule consists mostly of Dr. Phil, Gayle King and a few other shows endlessly repeating, 24/7. There are also a lot of house ads and direct-response ads from companies such as Proactive, as you'd expect from a new venue.

Madison Avenue's lack of enthusiasm for OWN demonstrates how difficult it is to create high-priced, branded TV media in a web-based, commodity world. In general, the TV business has done a great job of specializing its content (think of the hundreds of cable channels that are devoted to a single topic) and restricting buying opportunities for mass-audience content (the broadcast networks deliberately withhold ad inventory of prices fall and force advance buys months ahead of time when prices rise).

That has kept the price of advertising on TV high. It's a stark contrast to the web, which also has specialty publications and mass-media vehicles. But the inability of web publishers to restrict inventory or fend off cheap competition means there is only downward pricing pressure on ads.

One bets against Winfrey at one's peril, of course. She has a huge audience and there's no reason that audience isn't big enough to create high enough ratings on a cable channel with low expenses -- most of the shows on OWN are studio talk-fests. In theory, there's no reason she can't compete with Lifetime, HGTV, and all the other female-skewing networks out there. Despite that, it seems advertisers still want to see proof of the promise before they wade in.


Image by Flickr user nayrb7, CC.