Abruzzese talks about what the upfront is like from the other side
After 22 years of selling broadcast inventory at CBS, 12 of those as head of sales, Joe Abruzzese last fall took over as president of Discovery Networks, overseeing all ad sales—at a salary of $1 million-plus. Abruzzese is the first major broadcast executive to defect to cable. Adweek Magazines checked in with the exec as he prepared for his first cable upfront.
Adweek: How does it feel to be entering your first upfront as a cable guy?
Joe Abruzzese: Different. It isn't about total sell-outs but about establishing a base. Network lives and dies by the decisions made in the upfront, but we can have a great upfront and only be half sold.
Adweek: There's been much ado about how you are going to bring more dollars to cable. In as specific terms as possible, how do you plan to siphon broadcast's share of ad dollars in the upfront?
JA: I am not sure it will be in the upfront, but we will stem the bleeding. As far as salesmanship, it is what you do every day. A lot of it involves hand-to-hand combat, visiting clients every day and telling them why they should move money to cable. The frustration I see here is that, as quality gets closer to broadcast, the CPMs get farther away. I don't want to be anti-network, but I tell [clients] that they are paying for failure. The CPM is baked into the price—if the network marketplace is flat, yet ratings fall 5 percent, the clients are charged that 5 percent in CPMs. They don't know that, but it's just the way the business works. Cable's volume has gone up; we have seen it within Viacom. Pricing will catch up because of sell-outs. It wouldn't surprise me if USA, Lifetime, TNT were already sold out in scatter, which is a new phenomenon as far as I can see.
Adweek: How much money do you think you can help move this year?
JA: I would love to say that I could help move 40 percent of broadcast's dollars, but I can't put a finger on it. We have seen double -digit volume growth every quarter and we hope to keep it up. Discovery was well above 20 percent growth first quarter.
Adweek: You have argued in favor of broadcast spending for years. What is your argument now that you are batting for the other team? How do you just turn the tables and argue against a position you held to only a year ago?
JA: My argument? Don't buy 'em. We have to give them a reason not to buy, which is what [MTV Networks' executive vp/research and planning] Betsy Frank, [Turner Broadcasting evp/marketing and research] Barry Fisher and [Discovery svp/market resources] Beth Rockwood do every day. Otherwise, what I said when selling broadcast is just as true as what I argue here. Besides, we anti-sold our broadcast competitors. Cable was never a target. Why would we do that? Cable is priced lower. Now I still want to go after the networks because they are higher priced. I am not going to go after cable networks that have lower CPMs than Discovery.
Adweek: Are you an interloper? Does it matter to media buyers that you have turned 180 degrees?
JA: Someone gave me the Hillary Clinton "I have always been a Yankees fan" award, but I have good relationships with my fellow salespeople. As far as selling cable against broadcast, it is not that you are lying. It is just a different perspective.
Adweek: Media buyers want hot shows and demos for their clients. What can you offer that fits the bill?
JA: TLC has hit shows and Discovery has hit shows. However, you can also have a hit network like Animal Planet by vertically programming it right. However, there are different tiers. Top tier sells out, middle tier almost sells out and lower never sells out. Cable gets lumped together, which is not always fair.
Adweek: In a time of copious presentations, how do you break through the clutter?
JA: We go through the schedule and find out what works for each client. For example, Lowes is a major sponsor for Trading Spaces and Home Depot is the sponsor for [TLC's] While You Were Out.
Adweek: In cable, networks tend to have a few cool shows surrounded by so-so stuff. How can you leverage the good stuff, like TLC's Trading Spaces, with the not-so-hot programs?
JA: We always will. Everybody does it. [CBS' head of sales] Joanne Ross is not going to sell Everybody Loves Raymond alone.
Adweek: After 20 years in broadcast, is it daunting to be juggling about 2 million GRPs?
JA: The biggest challenge is how much you have to cover and how to organize the sales effort. We have a third more staff than other networks and we break out in groups. We don't have to do everything in two days like a broadcast network.
Adweek: How do you think the upfront is going to shake out?
JA: There is a groundswell in cable. I think overall dollar volume could be up 20 percent or more in cable, and 5 percent in broadcast, but I really can't predict how much money will be received. Broadcast pricing will be in the double digits and it will sell out again this year, which will bode very well for cable.
Adweek: So, do you plan on staying long?
JA: I have two and a half years left on my contract.