When the Discovery-Scripps merger closed last March, the combined company’s new ad sales chief, Jon Steinlauf, had just three weeks to pull together Discovery Inc.’s first upfront event. This year, Steinlauf had a lot more time to prepare but his upfront strategy is ultimately quite similar: focus on securing big increases for one popular but undervalued network in the portfolio.
So while Steinlauf, CEO David Zaslav, chief lifestyle brands office Kathleen Finch and chief brand officer for Discovery and Factual Nancy Daniels will be spotlighting approximately 10 of the company’s 17 networks during their annual upfront presentation this afternoon at New York’s Alice Tully Hull, TLC will be the top priority for Steinlauf in this year’s negotiations.
During last year’s talks, Steinlauf secured big increases for ID, which he told Adweek had been his “No. 1 priority.” This year, he’s shifted his focus to TLC, which he said has the same “perception issues” that ID did last year.
“I’m the kind of sales leader who believes that the networks on the rise are the ones we want to focus on as an organization,” said Steinlauf. With 17 networks in his portfolio, “you can’t think about them all in the same way.”
With shows like Dr. Pimple Popper, which helped TLC became the No. 1 cable network on Thursdays among women 25-54, the 90 Day Fiancé franchise, the Trading Spaces revival and I Am Jazz, about gender transformation, the network is “about inclusivity and celebrating differences,” said Steinlauf. “We feel in a supply-starved world, people are looking for networks with momentum.”
Steinlauf will continue to seek increases for ID, which he sees as a network with “a lot of room to grow.” Much like HGTV, ID offers 800-900 original hours of programming each year, with premieres each night. So instead of drawing viewers to just one or two shows each quarter, “they like just about everything you’re doing, so you get the benefit of that habitual every night viewing, and then the ads get seen,” said Steinlauf.
This will be Discovery’s first upfront since Steinlauf reorganized the sales teams last summer around three network bundle structures of four networks each, grouped by synergies in audience, content and ad categories. HGTV, ID, Animal Planet and DIY share one group, as do Food Network, TLC, Cooking Channel and OWN. Discovery, Travel, Science and Motor Trend Network make up the third bundle.
In this year’s talks, Steinlauf will be touting Discovery Premiere, the ad offering he rolled out last June, which allows brands to advertise exclusively in first-run episodes from a mix of the 30 most-watched shows across the entire company.
“As time goes by, no other company is in a position where we can put 30 shows out there that are comparable in size of ratings and have better engagement and better branding around it, and in some cases, better live viewing,” said Steinlauf.
However, the ad sales chief decided to “jumpstart” the offering ahead of the upfront with a pair of new studies. One of them took actual $5 million, four-network broadcast schedules from technology and automotive categories in Q1 2018, and reallocated $1 million of that spend to Discovery Premiere. Steinlauf said the CPM dropped 12%, reach increased 11% and impressions on adults 25-54 went up 13%.
A second study, with Nielsen’s Consumer Neuroscience division, compared engagement with 16 identical ads in four categories (insurance, movies, tech and auto) in five broadcast shows and five Discovery Premiere shows found that viewers were 46% more engaged with those ads on Discovery Premiere compared to the broadcast prime ads.
Another upfront focus will be Discovery’s Go apps, which offer significantly more content than the VOD offering from most cable companies. If the Go apps were a standalone business, said Steinlauf, they would be the company’s sixth-largest ad sales network.
With advanced advertising “a bigger topic of conversation this year,” said Steinlauf, he expects more interest in the company’s audience targeting offering, Discovery Engage. Currently, 100 advertisers are using Engage, which has an 80% renewal rate, said Steinlauf.
Now that the company has had a full year to integrate the Discovery and Scripps networks, it is offering more opportunities for advertisers across the entire portfolio. Steinlauf pointed to Buddy vs. Duff, which aired on the Food Network and united Food’s Duff Goldman and TLC’s Buddy Valastro. The episodes included cake challenges featuring Richard Rawlings (from Discovery’s Fast and Loud) and Christina Anstead (from HGTV’s Flip or Flop).
With both Goldman and Valastro receiving new series following Buddy vs. Duff, brands could buy into the arc of Buddy vs. Duff and then follow the stars into their new shows.
Next month, HGTV will be airing Say Yes to the Nest, featuring the same couple who appears on TLC’s Say Yes to the Dress. “You get to see them buy their dress and buy their first house on two different networks on the same night,” said Steinlauf.
The ability to promote across the entire Discovery Inc. portfolio helped give Food Network ratings and reach boost over the past year. “Now that we’re part of a company with a 25 share of cable viewing every night [among women 25-54], viewers of these channels are seeing (promos),” Steinlauf said. “We didn’t talk a lot about this back in March when the deal was closed, but I think there’s real value in that.”
The cross-promotion, he added, helped Discovery finish the first quarter with the top four networks in women 25-54: ID, HGTV, TLC and Food Network.
Hitting the road
Today’s New York event is the fifth stop on Discovery’s upfront tour this year, after earlier visits to Boston, Atlanta, Detroit and Chicago (the company will close things out in L.A. on April 24).
“It’s a model that works for us,” said Steinlauf. “Attendance is always good. As long as the audience shows up, we can justify the effort and expense that goes into it.”
Even with so many networks to cover, Steinlauf tries to keep the upfront event to 70 minutes, focusing on the company’s top 10 networks but also talking up Discovery Premiere, Discovery Engage and the Go apps.
While the company will unveil several new programming announcements during the presentation, it’s still unclear whether two of Discovery’s most-anticipated offerings will be a part of Steinlauf’s upfront talks.
Last week, Discovery said it would be creating its own global streaming service as part of a new BBC content partnership. While the service is supposed to roll out next year, Steinlauf isn’t yet sure whether he’ll be able to able to sell any inventory in this year’s upfront. “I’m hoping, because it’s a great demographic,” he said.
The jury is also still out on the upfront inclusion of the new network focused on Fixer Upper’s Chip and Joanna Gaines, which will replace DIY when it launches next summer, as well as a related OTT offering. “It’s still undetermined,” said Steinlauf.