$43.6B U.S. agency revenue
Last August, when the media praised celebrity doctor Mehmet Oz for helping to save a British tourist who'd been hit by a cab, Hearst Magazines' multi-million dollar bet on a Dr. Oz magazine seemed like money in the bank.
All of that hero talk seemed to be forgotten this week, however, as a Senate subcommittee pilloried Dr. Oz for hyping dubious miracle cures on his TV show.
"I don't get why you say this stuff because you know it's not true," Sen. Claire McCaskill, a Democrat from Missouri, told Dr. Oz during a hearing on consumer protection Tuesday.
She was referring to Dr. Oz's enthusiastic language around supplements like Pure Green Coffee beans, which he has told viewers "burns fat fast." There's little evidence to support these claims, according to a CNN report this week. And the Federal Trade Commission is suing the makers of Pure Green Coffee beans for allegedly duping consumers with fake news sites and false health claims.
"Why, when you have this amazing megaphone and this amazing ability to communicate, why would you cheapen your show by saying things like that?" Ms. McCaskill said.
Although he was dubbed a "snake oil salesman" in the media this week, and was criticized in a lengthy New Yorker article last year, Dr. Oz will likely survive the public bruising, according to Peter Himler, founder of the PR consultancy Flatiron Communications. "He has enough reputation capital in the bank to weather it," Mr. Himler said.
But the controversy comes as Hearst Magazines is balancing millions on the Dr. Oz brand with the introduction of its newest magazine, Dr. Oz The Good life, which published two test issues this year. At least one advertiser from the pilot issues reached out to Hearst in the wake of Dr. Oz's appearance on Capitol Hill, according to people with knowledge of the matter.
Before its introduction, Hearst promoted the magazine to media buyers by sending them a series of weekly emails containing a video of Dr. Oz offering a 40-second health tip.
The test issues went well, and Hearst is now planning three more issues in the back half of 2014, starting with the magazine's first "official" issue for August/September, before going to a regular frequency of 10 times a year. It will guarantee advertisers a paid circulation of 450,000 this year, and likely more in 2015.
A spokeswoman for Dr. Oz The Good Life said in an email that the magazine advocates a healthy lifestyle through diet and exercise, and it features products and strategies supporting that. "We are equally mindful of the advertising we run," the spokeswoman said.
The magazine's second pilot issue carried just three supplements ads: Spring Valley vitamins and supplements; Carlson, seller of "heart healthy nutrients," according to its ad; and LifeExtension, which promoted two skin treatments to help combat the effects of aging.
The bulk of the ads came from major beauty advertisers, as well as some retailers, fashion and health and wellness brands. It's unlikely that the negative press will dissuade brands from advertising in the forthcoming issues, said Michele Toller, VP-offline investment and activation at Empower MediaMarketing. "If the client digs beyond the headlines, my gut tells they won't be scared off," she said.
Depending on celebrity
Food Network, HGTV and O, The Oprah Magazine are tied to TV and therefore come with built in audiences, which is Hearst's hope with Dr. Oz, whose syndicated talk show runs on TV stations including 18 of Hearst's own. He also has a newspaper column and radio segment in every major U.S. market.
The loyal fans he's acquired through these media properties won't peel away because of this week's bad press, according to Mr. Himler. All Hearst needs to do, he added, is wait for the negative coverage to pass, which had already mostly happened by Thursday.
"When the news broke on Tuesday, Hearst was probably sitting uncomfortable," said Mr. Himler, who has worked with media clients including The New York Times. "Next week they'll be more comfortable, and in another week it'll be in the rearview mirror."
Dr. Oz, whose attitude before the subcommittee swung from contrite to politely defiant, acknowledged his use of "flowery language" to describe certain products and said he had already toned it down -- though the impact on marketers of those products are negligible. "Marketers are still able to select a single phrase of support without the surrounding context and continue profiting unimpeded," Dr. Oz said.
He also defended himself.
"My job, I feel, on the show is to be a cheerleader for the audience, and when they don't think they have hope, when they don't think they can make it happen, I want to look, and I do look everywhere, including in alternative healing traditions, for any evidence that might be supportive to them," he said.
During an interview with Ad Age in January, Dr. Oz expressed a similar sentiment about his magazine. "This is not a health magazine," he said. "It's a magazine about life through the lens of a healer."
He later added: "This magazine will change people's lives."