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With O'Reilly Gone, All Eyes on Advertisers

It’s the spring of brand safety, and Fox News just gave advertisers some reassurance, cutting ties with its most prominent anchor Bill O’Reilly amid allegations of sexual harassment.

“After a thorough and careful review of the allegations,” the No. 1 cable news network said in a statement on Wednesday, “the company and Bill O’Reilly have agreed that Bill O’Reilly will not be returning to the Fox News Channel.”

“Tucker Carlson Tonight” will take over the 8 p.m. timeslot starting next week. “The Five” will move into the 9 p.m. timeslot Carlson previously occupied, having been brought in to fill the role vacated by Megyn Kelly in January.

The outcome is probably the least objectionable option for the network, which even without O’Reilly is expected to continue to ride the so-called Trump bump.

“The O’Reilly Factor” was considered Fox News’ marquee show, drawing as many as 4 million viewers on average in the first quarter of the year and 0.61 ratings in the core 25-to-54 demo.

But Carlson retains a fair share of that viewing.

Since “Tucker Carlson Tonight” replaced “The Kelly File” in FNC’s 9 p.m. timeslot, ratings for the hour have skyrocketed—thanks in large part to the impact the Trump presidency has had on the overall cable news landscape.

In the first quarter of this year, Carlson’s show averaged 3.27 million viewers and a 0.57 rating in the core news demo, which works out to around 689,000 adults 25 to 54. By comparison, Kelly’s show in the first quarter of 2016 drew 2.52 million viewers and a 0.42 rating, good for 504,714 members of the relevant demo. All told, Carlson’s first-quarter deliveries were up 30% in total viewers and 37% among the advertiser-coveted segment.

Since The New York Times first reported on April 1 that O’Reilly and Fox News paid $13 million to five women to settle sexual harassment allegations, more than 60 advertisers fled “The O’Reilly Factor.” The majority of those advertisers stuck with Fox News, shifting their spending to other programs on the channel.

Brian Wieser, analyst, Pivotal Research Group, expects the total impact of O’Reilly’s departure to be limited, estimated that anyone who replaces him in the 8 p.m. hour will still draw about 75% of his audience.

“Most viewers won’t all of a sudden shift to CNN or MSNBC or NewsMax, for that matter,” Wieser said in an email.

A silver lining for Fox
In a sense, O’Reilly’s ouster may even prove to be a blessing in disguise, as it presents Fox News with an opportunity to jettison some of the low-value viewers who make up the majority of the 8 p.m. audience. Per Nielsen, only 18% of O’Reilly’s first quarter viewers were demographically relevant to Fox News’ advertisers; in other words, more than four-fifths of those who tune into the show every night didn’t contribute to the network’s ratings guarantees.

That said, Tucker Carlson’s audience is in no danger of missing a week of shows because they’ve headed out to Coachella. Only 21% of the “Tucker Carlson Tonight” deliveries during the previous quarter included members of the target demo.

Earlier on Wednesday, ahead of Fox News’ announcement that it would drop O’Reilly, several advertisers said they were continuing to monitor the situation with no immediate plans to make any changes.

“The controversy around ‘The O’Reilly Factor’ program and allegations made against Bill O’Reilly are matters that we take seriously and will continue to monitor,” a spokeswoman for Sanofi Consumer Healthcare said in an email. “We do not endorse the behavior or opinions of program hosts or the content. We have reallocated our current advertising originally scheduled during this program. We will continue to monitor and evaluate the situation as we plan future advertising decisions.”

A spokeswoman for Mercedes-Benz said the company pulled its ads from “The O’Reilly Factor” indefinitely and reassigned those units to other Fox News programming.

An Allstate spokeswoman said it had no change to its original statement: “Inclusivity and support for women are important Allstate values. We are concerned about the issues surrounding the program and we have suspended our advertising.”

O’Reilly was responsible for nearly $150 million in ad revenue for Fox News in 2016, according to Kantar Media, which includes reruns of “The O’Reilly Factor.” This is 19% of Fox News’ more than $780 million in ad revenue last year, making O’Reilly far and away the biggest ad revenue generator out of any anchor on the network.

O’Reilly’s departure comes as longtime ad sales chief Paul Rittenberg is set to depart from the company at the end of the month.

‘The network will continue to be a powerhouse’
In an internal memo sent to Fox News staffers late Wednesday afternoon, 21st Century Fox chiefs Rupert Murdoch and his sons Lachlan and James confirmed that O’Reilly would not be returning to the network before doffing their caps to the ousted anchor.

“By ratings standards, Bill O’Reilly is one of the most accomplished TV personalities in the history of cable news,” the memo read. “In fact, his success by any measure is indisputable. Fox News has demonstrated again and again the strength of its talent bench. We have full confidence that the network will continue to be a powerhouse in cable news.”

Contributions: E.J. Schultz, Anthony Crupi, Jack Neff, Adrianne Pasquarelli

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