• by Wayne Friedman , March 16, 2018

Discovery Inc, now a bigger cable TV network group thanks to the recent Discovery Communications and Scripps Network Interactive merger, is still working out the specifics of its combined upfront advertising strategy.

But one overriding industry message is clear: Advertising on traditional TV networks, especially cable TV, is still a bargain.

Jon Steinlauf, an 18-year veteran at Scripps, recently named chief U.S. advertising sales officer of Discovery Inc., is now overseeing 19 networks. He says the formula is easy to follow.

“If you have a $20 CPM [cost per thousand viewers] TV show, that means $2 per hundred viewers; 20 cents per 10 [viewers]; and two cents per one [viewer],” he said, speaking with Television News Daily.

Make this one viewer an upscale female in the 25-54 demographic on a Discovery/Scripps network: “You are paying two cents to own that screen for 30 seconds and have her watching the ad all the way through. That’s value proposition of a top television seller.”

Steinlauf says this back-to-basics message is what the company needs to do.

One positive factor for much of the Discovery/Scripps networks' content is that non-scripted programming means further cost-effectiveness and consistency for the viewers -- a gain for advertisers.

Steinlauf reiterates what David Zaslav, president/CEO of Discovery Inc., says about the value of its programming -- that non-scripted shows can cost $400,000 an episode, with scripted TV series episode running up to $5 million on a major broadcast/cable entertainment network.

“By making a lot more content and owning it, we can provide audiences with a more consistent night-to-night experience of first-run programming -- and that also contributes to live viewing.”

Steinlauf recognizes that major TV brands want to pin their TV commercial buys -- possibly as part of some new type of guarantee -- on “advanced audience targeting” data. He says this process is moving slowly.

“Some marketers want to buy against their first-party data -- but they are not necessarily looking to the TV network industry to do a lot of the data crunching,” says Steinlauf. “They are more interested in understanding how shows, dayparts and networks can best service the million they really want to reach.”

He says advertisers and agencies will tell a TV network company like Scripps that certain budgets are registering, given what data the marketer sees. But that is not enough.

“All these network companies are trying to build their own black boxes to determine how best to go on the offensive -- not just let the clients tell us with their dollars where they think they should be buying. We also have to have a seat at the table to tell them, ‘we have done our own work on our audiences.’ ”

The new Discovery/Scripps now airs around 500 different TV series a year, that can equate to some valuable data for an TV marketer, he says. Going into this year’s upfront, Steinlauf doesn’t sense much change in regards to the current TV ratings guarantee model. “I don’t think the currency is going to shift much as Discovery and Scripps come together.”

He believes Discovery/Scripps, and much of cable, will still be mostly tied to Nielsen C3 metric, the average commercial minute rating plus three day of time-shifting, with many broadcast networks having a mix of C3 and C7 measures.

Steinlauf says many scripted TV shows are heavily time-shifted -- and that is a problem for advertisers. “The scripted [programming] channels are having a hard time getting ads to cut through.”

But with its large TV non-scripted portfolio, TV commercials on Discovery/Scripps content are more engaging, he says, and studies using neuroscience can prove it.

Going forward, Steinlauf says the newly combined entity wants to bill itself as as “global leader in real-life entertainment.”