Discovery Won’t Limit Number of Discovery+ Marketers For New Streamer

Discovery Inc. finally took the wraps off Discovery+, its new global streaming service, just two weeks ago—and only one month before its Jan. 4 debut. But unlike NBCUniversal’s rival streamer Peacock, Discovery isn’t limiting the number of brands that can participate in the launch of its new platform. “It’s not a club with a limited number of memberships,” Jon Steinlauf, Discovery’s chief U.S. advertising sales officer, said of Discovery+. “We're not doing exclusive category advertisers; we want to accommodate as many advertisers as we can.” The streamer will debut in the U.S. at two price points: an ad-supported tier for $4.99 a month, and an ad-free tier that will cost $6.99 a month. During its investors event on Dec. 2, Discovery said that five advertisers—Lowe’s, PepsiCo, Toyota, Boston Beer Co. and KraftHeinz—have signed on as inaugural advertising partners for the “ad-light” tier, which will be incorporated into the company’s new unified ad offering, OneGraph. Those five companies were named inaugural advertising partners “based on their level of spend,” said Steinlauf, which “will determine access to the most innovation and the ad products we’re building for it.” But any other brand is also able to buy inventory on the platform, On Discovery’s linear networks, “we’ve always believed in trying to accommodate as many advertisers as possible, and that’s the approach we’re going to take” with Discovery+, he said. The streamer's “ad-light” tier will include no more than five minutes of ads per hour. Each hour-long program will have the same number of ad breaks per hour as it does on linear TV—five—but each pod will be limited to 60 seconds, and feature a countdown clock so viewers know how quickly the programming will resume, said Steinlauf. Discovery+ will offer several ad formats available on streaming rivals like Hulu and Peacock, including binge ads, pause ads and the ability to have a single advertiser sponsor an entire episode. There is also a voice format, in which viewers will be directed to use their voice-activated remotes to bring up more information about a brand. The platform also features a “contextual search” ad format, which will search a program’s closed captioning to allow marketers to advertise against specific words uttered in an episode. That could appeal to food marketers who want to advertise a specific ingredient mentioned in a Food Network or Cooking Channel program. “We can isolate just those episodes so that your message can be in and around content that's using the product that you're advertising,” said Steinlauf. Additionally, Discovery has the opportunity for commerce offerings tied to several of its brands that will be featured on the platform, including Food Network and HGTV. Steinlauf “quietly” included Discovery+ in several of his upfront negotiations this year, but otherwise did not actively solicit ads on the platform until the Dec. 2 investors day. However, now that the platform has been officially announced, “people are clamoring to get into this,” Steinlauf said, especially with the launch less than three weeks away. Expanding the brand Having an OTT offering allows Discovery to expand its brand beyond the 85 million homes who subscribe to its cable networks. “We’re excited about being in the game with an advertising platform, because there’s a scarcity of supply,” given that most of the most-viewed streaming platforms—Netflix, Amazon and Disney+—do not have ads, said Steinlauf. Discovery isn’t sure yet what the split will look like between subscribers who chose the ad-free and ad-light versions of the platform, especially because the two tiers are only separated by $2 each month (the other top platforms, charge between $4-$6 more each month for the ad-free option). “We’re going to test and learn,” said Steinlauf. As the platform prepares to rollout, its ad sales will now be overseen by Jim Keller, who had been vp, national ad sales at Hulu. Steinlauf just hired Keller as evp, digital ad sales and advanced advertising, leading ad sales for Discovery+ and the other digital platforms in the U.S. “AVOD advertising is a relatively small marketplace, and Hulu has the overwhelmingly largest share. We’re excited about Jim coming over,” said Steinlauf of Keller, who started his new position on Monday. Along with Discovery+, in the upfront Steinlauf also sold inventory for another soon-to-arrive venture: Magnolia Network, Discovery Inc.’s upcoming joint venture with Chip and Joanna Gaines’ home and lifestyle brand, Magnolia. The network’s October launch was postponed until 2021 due to the pandemic, and Discovery+ will feature an early preview of content from the upcoming network, including a cooking show, Magnolia Table With Joanna Gaines, and the debut episodes of 10 other Magnolia Network series. Discovery will be speaking with the marketers who bought Magnolia Network inventory in the upfront about also advertising in the Magnolia content on Discovery+, Steinlauf said.