September 15th, 1997

Channel One Taps Principals as Promoters

By William M. Bulkeley
Wall Street Journal

When J.C. Penney was promoting its blue jeans to high school students in Curry, Ala., this past spring, Barry Barnett distributed discount coupons.

Mr. Barnett doesn’t work for Penney. He’s the principal of Curry Middle School, and he handed out coupons mailed to him by Channel One , the advertising-supported daily news program watched in his school and 12,000 others across the country.

Doesn’t a principal have more important things to do? "If it happens very often, it could be a hassle," Mr. Barnett acknowledges.

With little public notice, school teachers and administrators are being enlisted in marketing campaigns aimed at teenagers via Channel One . Teachers have helped students write commercials for Snapple juice drinks and design Pepsi-Cola vending machines. Students have gone to the principal’s office to pick up coupons for Subway sandwiches or sign petitions for Reebok.

Channel One says it involves school personnel very selectively, and doesn’t have any such promotions underway at the moment. But it was reluctant to discuss its plans for the new school year, other than saying at least one advertiser is expected to have a coupon program this fall.

To longtime critics of Channel One , turning teachers into marketing partners is exactly the kind of dire scenario they feared when the controversial TV network began making successful inroads into the nation’s schools.

"They’re pursuing a strategy of increasing sophistication that turns the entire school into an advertising system," says William L. Rukeyser, a consultant with the Oakland, Calif.-based Center for Commercial-free Public Education.

Involving educators with promotions "legitimizes the commercials because the kids see it sanctioned by the school," adds Roy Fox, a communications professor at University of Missouri who studied the impact of Channel One on 200 rural students for a 1996 book called "Harvesting Minds." The message is that "your principal is working for Reebok," complains Jim Metrock, a Birmingham, Ala. businessman and a Channel One opponent.

Channel One , its advertisers and some educators argue that school-based promos and two minutes of daily commercials are a reasonable price to pay for the 10-minute news show Channel One airs, and the free use of its video equipment.

David Tanzer, chief executive of the New York-based network, says it is sensitive about turning schools into merchandisers, but that it only runs promotional campaigns that benefit advertisers and students alike. He adds, "We always build in something for the school," such as a

chance to win equipment to provide Internet access on television screens.

Channel One says it is seen by some eight million students, or roughly 40% of those attending large high schools and middle schools. The network was founded by media entrepreneur Christopher Whittle in 1990, and sold to K III Communications Corp. in 1994.

K III officials say business is booming. Channel One has added 18 new advertisers this year, boosting the total number to about 60. That’s up from fewer than 30 when Mr. Whittle sold it, says Mr. Tanzer. "We’re at a virtual sellout for the fall semester," he adds.

Demand is so strong that Mr. Tanzer says Channel One likely will change its strategy and begin actively recruiting new schools for the first time in five years, betting that advertisers will pay more for a larger audience. People familiar with Channel One ‘s results say that last

year it had operating income of more than $30 million on $70 million in sales.

Part of Channel One ‘s appeal for advertisers is that teenagers have become an elusive target. Studies show that they are watching less TV, both on networks and cable, than adults are, and less than teens in previous years. "We’ve had no audience erosion," boasts Martin Grant, Channel One ‘s president of sales and marketing.

Channel One executives are particularly proud of the network’s campaigns that get students to take action—often aided by teachers or administrators. "Advertisers can really hit a home run by involving our audience," says Mr. Grant.

When J.C. Penney Co. wanted to encourage kids to buy its Arizona brand jeans last year, Channel One helped it distribute coupons good for 25% off, dubbed "student passes," and free T-shirts, which it shipped directly to principal’s offices. " Channel One was a great partner," says Lynn Greiner, Penney’s national media manager. "We felt we saw the [sales] needle move a little bit because we could drive people into the stores."

While Channel One ‘s contracts with schools require that every student watch the entire broadcast, plus commercials, every day, the promotional activities have been voluntary. Mr. Tanzer says about 40 schools declined to hand out the Penney coupons, but that most were happy to help their students save money on clothes.

Not every principal of a school with Channel One is thrilled with such promotions, however. "I don’t think it’s appropriate" to hand out coupons, says Larry Wiederstein, newly-appointed principal of Parsons High School in Parsons, Kansas, (which carries the broadcasts.)

Some Channel One promotions involve more than coupon distribution. Mr. Tanzer says the campaigns are especially effective when they create "something interesting that teachers can get behind," such as an art project.

Pepsi Cola, a longtime Channel One advertiser, did just that last spring when it urged students to create a design for the front of Pepsi-Cola vending machines as art-class projects. The ad ran twice last spring and drew 1,000 entries.

Similarly, Snapple, then owned by Quaker Oats Co., offered a trip to Los Angeles and a $10,000 scholarship for the winning idea for a Snapple

television commercial. The winning entry, from 15-year-old Paul Agustin of Forestville, Md., showed kids in detention using Snapple bottlecaps to signal each other secretly in Morse Code. He says his English teacher helped him edit the entry down to the 50-word limit.

Channel One also helped Reebok International Ltd. enlist student particiation in its tongue-in-cheek bid to have football made an Olympic sport, part of an ad campaign featuring Dallas Cowboys running back Emmitt Smith. Students were invited to sign the petitions in the principal’s office. "The idea was to associate our brand with Emmitt, leading into the football season," says David Fogelson, a Reebok spokesman. "There was a call to action with the petition."

Channel One officials say that students and teachers benefit from such promotional campaigns as well. "Teachers are so desperate to make the lesson relevant that if they can get them interested through a Reebok campaign, they’ll do it," Mr. Tanzer says.

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