In recent months, his media buying costs have skyrocketed by 50% or more, he said, although he was unable to determine why those costs were rising. The majority of this advertising is on television, he said.
“So we’re going to end up with a television system and our plan is to cover at least half of the United States,” Bhargava said. “And then we have a way to not only advertise our product, but maybe swap some of the advertising with other outfits. … And this (NewsNet) kind of pays for almost everything, this That I like.”
Advertising spending in general is on the rise. US media spending is expected to reach $320 billion this year, an increase of 12.2%, according to figures from Ad Age, citing data from Publicis Groupe.
David DeMuth, chairman and CEO of Southfield-based advertising firm Doner Co., said it’s hard to say whether Bhargava’s strategy will work. This is especially true as advertising has become more fragmented, he said.
“I think for advertisers, you really need to understand your audience and track them and find more effective placement for them now, and those opportunities are there,” DeMuth told Crain’s. “But media has become a much more data-driven business than ever before. To (Bhargava) buy a media platform and advertise 5-Hour Energy there, like, I don’t know if it’s going to get a return on investment on it or not, it depends on who is watching this medium.
Content-wise, Bhargava said they’ve chosen a simple-to-follow motto for the network: “The news…just like before.”
The programming style is based on Headline News, now called HLN, a CNN-owned news network that primarily focuses on delivering simple news programming on a variety of topics. For example, this week’s news segments focused on various health issues, the Pennsylvania primary election, and national weather forecasts.
“There’s so much opinionated media out there, left and right,” said Phil Hendrix, NewsNet’s news director. “We are really committed to trying to do journalism like before.”
NewsNet has bolstered its staff with the hiring of veteran news anchors, including Glenn Ray and Jill Washburn, and the workforce currently stands at around 20, a number that could double over time, the company’s CEO said. , Vince Bodiford, a Bhargava lieutenant.
While acknowledging that the deal is largely a publicity game for some of its products, Bhargava said consumers shouldn’t expect to see 5-Hour Energy ads plastered on the newscast, which he says , will have the appearance of a traditional newscast focused on current events. of the day, human interest topics, weather and other broadcast news clips. Other ads will also be typical of what you see on traditional newscasts, he said.
Still, over time, Bhargava said the plan was to shift much of 5-Hour Energy’s advertising to the network.
Bhargava is far from the only wealthy businessman to buy media companies in recent years.
Tesla founder and world’s richest man Elon Musk late last month struck a deal to acquire social media company Twitter for around $44 billion, a deal he has since attempted to go back or stop.
In another high-profile example, Amazon billionaire Jeff Bezos owns The Washington Post.
Admittedly, the scale and scope of NewsNet is much smaller than these properties. It launched at Cadillac in County Wexford in 2019, and Bhargava said the company largely lacked the capacity to learn about its specific audience levels, which it is working to implement.
NewsNet founder Eric Wotila retained a 10% stake following the acquisition by Bhargava and holds the title of chairman under the new ownership structure.