Upfronts: Discovery Pushing Premiere, Go Apps

A year after acquiring Scripps Networks Interactive to create a company with about 20% of cable viewing, Discovery really means business.

Jon Steinlauf

The theme of Discovery's upfront presentation Wednesday evening in New York is Real Life Builds Real Business.

The theme is designed to separate Discovery from the programmers that focus on high-cost scripted series. But at the same time, Discovery sees this as a good time to push to get its highest-rated shows into the broadcast primetime mix, particularly with Fox changing its programming strategy to emphasize live sports, which is a big ticket item for advertisers.

Related: Chip and Joanna Gaines Fix Media Venture with Discovery

When you look at Fox broadcast prime, there's going to be somewhat of a shift away from entertainment, said Jon Steinlauf, chief advertising officer for Discovery in the U.S. It's taking a daypart that's expensive to begin with, that has a shrinking supply of ratings points and further tightening supply.

Related: Discovery Lands Nine Networks on YouTube TV

Steinlauf said advertisers are looking for ways to make their clients TV ad dollars go further as prices climb and its Discovery Premiere product could serve as a fifth network, adding a new supply of high rated shows to primetime.

Just before last year's upfront, Steinlauf rolled out Discovery Premiere. Premiere packages new episodes of the 30 or so highest-rated Discovery programs and franchises that draw a one or more in the demo. Some of those shows include Street Outlaws, Kids Baking Championship, Haves and Have Nots, Chopped, Property Brothers, Guy's Grocery Games, Dr. Pimple Popper, Gold Rush, Trading Spaces, 90 Day Fiance and Shark Week.

Premiere advertisers get their commercials in the first position in pods, giving them viewership that exceeds the C3 or C7 average commercial rating for the show by 15% to 20%.

Steinlauf said premiere was a hit mostly in the scatter market last year, and will be a big part of this year's upfront. Discovery has done research on Premiere with Nielsen's Neuroscience Lab, which hooks up viewers to sensors to see how their heartbeats, eyeballs and sweat glands react to what they see on the screen.

Nielsen Neuroscience found that when viewers were shown identical ads for insurance, movies, tech/telco and automotive, their engagement levels were 46% higher when those ads appeared in Discovery Premiere shows compared to broadcast primetime shows.

Discovery also did another test in which it looked at the TV schedules for advertisers in the automotive and tech categories during the first quarter of 2018. Those advertisers spent about $5 million each on their broadcast campaigns. Discovery re-configured those buys as if they spent $1 million on each of the four broadcast networks and $1 million on Discovery Premiere.

So now it's a five network buy, said Steinlauf. We re-ran the performance of their schedule and found that for these auto and tech advertisers, cost-per-thousand (CPMs) dropped by 12%, reach went up 11% and target impressions went up by 13%.

We're finding that there's interest in this strategy because [Premiere] is being positioned as a fifth network. It's a strategic addition and not a replacement, not a substitution, he said. Between the high-quality cable prime time shows and the average of broadcast there's a big pricing gap. There isn't such a big impressions gap. This is a strategy some agencies are seeing as a new way to bring a fifth company into the marketplace.

Steinlauf also sees opportunities as more advertisers buy commercials on Discovery shows streamed via its networks individual Go apps. The Go apps offer fans the chance to view many more episodes of the shows than traditional cable VOD.

What we're finding is that the superfans are learning through the marketing about these apps and they're downloading the app and they're starting to watch the content more on demand, said Steinlauf.

He said the apps represent the fastest-growing ad supported business for us. The viewers are younger and they extend reach for advertisers who buy them in addition to linear viewers.

There's a big programmatic advertising market for that. A lot of the programmatic advertising is being sold based upon audience segments, he said. This is a glimpse into the future of how advertisers are going to target their [gross ratings points] at who they think are the best customers for their product.

Steinlauf said Discovery looks at its Go App business like an additional network. There are some people in our company who believe that Go as a business at some point might become the biggest network we own in ad revenue.

Discovery's Engage data-driven ad capabilities are also expected to be a big part of its upfront.

The big media buying agencies are asking about data in ways that they've never asked before, about being able to connect their pipe with our pipes and being able to connect their first-party data with our Engage data, he said.

We feel it's incumbent upon us to provide a service to the ad clients who want to know as much as they possibly can about viewership, he said. So if an advertiser says what we really want is a mom with two children in a house who are under 12,' Discovery can deliver."

In terms of individual networks, Steinlauf said that ID continues to grow and that Discovery has been successful in resetting prices to reflect its continuing status as a top-rated channel.

At the same time, the company is pointing to the inclusivity and multi-cultural content on TLC with shows like I Am Jazz and even Dr. Pimple Popper, in which individuals overcome challenges.

Celebrating difference is something that I think corporate America is starting to embrace more and TLC is the network t

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