David Zaslav, CEO, Discovery Inc., continues to plead the case of his cable networks -- especially around its big six channels -- when it comes to their collective power.
During a recent earnings call in May, he said: “The average CPM for broadcast is $55, and for us it’s $20, or less... We got the four players around us in price at $55 plus.. So you can go to a broadcast and buy a 0.8 for $55 or $58 and you come to us and buy a four [rating] for 40% of that.”
Now Zaslav didn’t specify what specific audience was attached for this CPM. But we are probably close in guessing he is talking about the old-school Nielsen 25-54 demographic -- something cable networks, as well as CBS and others, count on a lot to do business.
All that sounds like a bargain in buying Discovery.
But old-school thinking will talk up the issue around reach. Discovery’s networks don’t have the wherewithal to reach a wide variety of different TV consumers. Broadcast TV ad executives call this talking to the same viewers, over and over again.
Still, Zaslav isn’t greedy. He just wants a piece — giving advertising clients a great deal for some of their overall TV buy. During the earnings call, he said “broadcast is terrific. But you could also move some money... we can give you a spot where you reach everybody at once across all of our -- across our top six networks.”
Now with Scripps Networks as part of Discovery Inc. — especially with Food Network and HGTV — he says the entire network group can deliver “20% of women in America.” That would be more good news.
Now let’s go to the new-school stuff: For many, the limited “reach” argument also extends to digital media platforms. Is that a good comparison for Discovery -- that traditional, linear TV has some big pluses going for it?
And yet, traditional TV networks might not still adequately address all the key performance indicators that advertisers increasingly want to look at -- engagement data, website visits, in-store traffic and other “business outcomes” -- that digital media alleges to offer.
Everything for this upfront goes back to the basics -- old-school basics: How important are price comparisons among traditional, linear TV platforms going forward?