With Stephen Colbert, CBS Prepares for a Late Night Ad Windfall

Unlike David Letterman, Colbert embraces advertisers

Tonight, Stephen Colbert hosts a late-night show—CBS' The Late Show With Stephen Colbert—for the first time since The Colbert Report ended last December. It's the longest time the comedian has gone without performing in front of a live audience in almost three decades. "He's like a volcano ready to explode," said Nina Tassler, chairman, CBS Entertainment.

But one person is even more excited than Colbert about tonight's debut: Jo Ann Ross, CBS' president of network sales. "We can't wait. It's going to be a good week for CBS," said Ross.

That's because if all goes well—and the network's late-night upfront increases this year indicate that it will—today marks CBS' return as a major late-night behemoth among advertisers. "We're very excited to be able to look at our late-night daypart and say, wow, we're back on the map," said Ross. Added Chris Simon, evp, network sales: "Clients, advertisers and marketers have really embraced this guy."

There are two big reasons for that. First, Colbert should bring in an audience almost two decades younger—and significantly more attractive to advertisers—than the one that watched David Letterman as he signed off from The Late Show in May after 22 years. The median age of a Letterman viewer this year was 60; The Colbert Report's was 42. For much of the past three years, The Colbert Report and its Comedy Central lead-in, The Daily Show With Jon Stewart, dominated late-night advertising, in both 30-second ad rates and CPMs in adults ages 18-49. 

And equally as important, Colbert is embracing advertisers in a way that the infamously prickly Letterman never did.

A broad spectrum of brands

Advertisers got their first idea of how much things had changed for CBS' 11:30 p.m. time slot when Colbert attended the CBS development meetings with advertisers in New York and Los Angeles last spring. Sporting his "Colbeard" at the time, he was initially unrecognizable to many in the audience—including Ross herself. "He just was great. He answered questions and was entertaining and forward-facing, as we say," said Ross. "That was an opportunity that we had not had in the past to really showcase CBS late-night talent in that way. I think it spoke volumes to the clients who were able to be in the room at the time."

He scored with advertisers again during his CBS upfront debut in May. The advertiser and buyer excitement about Colbert began to pay off in this year's upfronts where CBS saw "healthy upfront increases in both pricing and volume" in the late-night daypart, Les Moonves, president and CEO, CBS Corp., told investors last month on the second-quarter earnings conference call. "Advertisers are clearly as excited as we are about the debut of Stephen Colbert," he said.

And now that the network owns both Late Show and The Late Late Show With James Corden (Letterman's Worldwide Pants had previously owned both shows), it will be raking in even more money. "Late-night programming obviously lends itself to online clips and increasingly to international syndication, too," said Moonves. "Our ownership in both of these shows is allowing us to monetize them across platforms and around the world in a way we never could with this daypart before."

Colbert's Late Show is attracting attention from a much broader spectrum of categories and brands than when Letterman was on the air. "Our previous shows had started skewing a little bit older, and that was indicative of who was advertising," said Simon. But now, categories like entertainment, tech, auto, restaurant, retail and financial are all showing strong interest. "We're seeing it all," said Simon. "We're seeing guys that hadn't been with us in a long time, and we're seeing guys who have advertised on our competitors."

In addition to the robust upfront, the network is seeing an active fourth-quarter scatter market. "Obviously some categories buy us more heavily than others, but I think having those two gentlemen in late night will even that playing field versus where we were a year ago at this time," said Ross.

While CBS won't name specific clients in advance of the debut, Ross pointed to New York Life, who was the Late Show website's exclusive advertiser this summer, as "absolutely" a category that you'll see more of. "There'll be a few others that may be a little bit of a surprise," she added.

CBS has extended Colbert's premiere by seven minutes (tonight's show will end at 12:44 a.m. instead of 12:37 a.m.), though Ross said the additional length is due to content, not additional advertisers. "The intent there was for the premiere to offer more content of Stephen's and really showcase him," said Ross.

'His currency is topicality'

Another new area that has opened up to advertisers now that Colbert has taken over: integrations. Unlike Letterman, Colbert "has said that he is very open to working with clients. He has also said that whenever he is looking to do something with a client à la what he did for Wheat Thins when he was at Comedy Central, it would have to be authentic and in his own voice," said Ross, who already has "a list of clients that really want to get into doing integrations with him."

Colbert and CBS have been slowly building up anticipation all summer. The show's official website and app launched on June 3, with a video of Colbert shaving his beard. Since then he's been rolling out content—including podcasts and videos, including one that mocked Donald Trump's presidential announcement. "I wanted our audience to know we haven't forgotten about them. I wanted to give them something as the summer went on," Colbert said last month.

"His currency is topicality," said Tassler of the summer rollout. "What's happening in the moment, what's happening today, and the fact that he has such an active digital dialogue with his audience sustains his relevance. So even when he went off the air, he and his team were very quickly up and running in terms of producing content for the summer. The exciting part is that he feels ever-present, even though he's not on broadcast."

Colbert's presence has ramped up in the days leading up to the launch. In addition to the on-air promos and advertising, he is also narrating driving instructions on the Waze traffic and navigation app through Sept. 22, and posted on Snapchat for the five days leading up to today's premiere. "We have him wherever we can," said Ross. 

CBS is also expecting Colbert to give a big lift to Corden "who has been out there basically on his own this summer" as CBS ran drama repeats at 11:35 p.m., said Simon. "We're relaunching him on Sept. 8 as well," he said.

Added Tassler: "This is great for him, it's great for Stephen, and it's great for us."