At Discovery, Joe Abruzzese Aims to Sell Ads Despite Shifting Terrain

Analysis: A veteran of TV's ad-sales game bets years of experience can trump new challenges to selling commercials

At Discovery, Joe Abruzzese Aims To
Courtesy of Discovery Communications

Joe Abruzzese doesn’t play professional football, but one evening a long time ago he found himself blocking and tackling during a broadcast of the Super Bowl.

His instructions that night came not from a quarterback, but from a prominent advertiser: Anheuser-Busch, the maker of Budweiser and a perennial sponsor of the pigskin classic. At this point in time, the company was at its peak, an American institution that had yet to be purchased by an overseas rival and one that spent millions of dollars to advertise on big TV-sports events. A top executive reached Abruzzese, then head of ad sales for CBS, in the middle of a game, with a serious problem: A member of the storied brewer’s founding Busch family had seen one of its expensive ads for the game on TV, and a technical glitch made it look terrible. Could CBS run the ad again?

The answer should have been a resounding “No.” The NFL, after all, maintains policies about how many commercials can run during the Super Bowl, and each ad at the time cost more than $1 million. How could the network do such a thing? Abruzzese quickly worked behind the scenes to have the commercial air a second time in an “isolated” ad break right after a time-out. Only the ad from Bud ran before CBS’ broadcast returned. The maneuver violated policy, Abruzzese acknowledged in a recent interview, but “we were right to do it.” In the end, a happy client usually means more business in the future.

Now Abruzzese, whose talent for selling TV commercials has helped fuel everything from CBS mainstay “Survivor” to the Discovery Communications institution known as “Shark Week,” is back on the gridiron, albeit one built on shifting terrain. Like many of his contemporaries, Abruzzese, a veteran of these trenches who put in more than two decades at CBS before joining Discovery in 2002 as president of ad sales for the company, will work over the next several months to sell the bulk of Discovery’s TV-advertising inventory for the coming programming season, a process known in the U.S. as TV’s upfront market. The job used to be a lot easier.

In 2016, advertisers are demanding a lot more for their TV buys. They want advertising that accompanies content on the traditional living-room screen as well as mobile ones. Abruzzese and his staff must consider video-on-demand, streaming video, even social-media ads related to feeds built around Discovery programs. More advertisers are experimenting with a technique known as “programmatic” buying that allows them to snatch up ad time on the cheap after they use algorithms to find specific audiences watching at specific times. Last year, Discovery unveiled a package of data offerings that gave advertisers new insights into how to place commercials more precisely on the company’s networks, which include Discovery Channel, TLC and Animal Planet, This year, Abruzzese and his staff are offering to place commercials in virtual-reality content built by Discovery programmers.

“Years ago, we used to drink at lunch. We don’t drink at lunch any more,” said Abruzese, known for his taste in a bespoke jackets and ties, describing the growing complexity of his job. Without offering these new techniques, Discovery would run the risk of losing ad dollars. “Clients want it. In some cases, they expect it,” he said of selling ads across a dizzying array of media venues. “It can be more work, but we want to do what’s best to drive our clients’ business.”

If Discovery gets things right, it will secure millions of dollars. In 2015, the company took in more than $1.5 billion in advertising for Discovery Channel, TLC, Investigation Discovery, Science Channel, Animal Planet, Discovery Family Channel and Destination America, according to data from market-research firm SNL Kagan. That figure doesn’t include what the company might take in from OWN, the cable network it co-owns with Oprah Winfrey, or other cable networks it operates like Velocity, American Heroes Channel or Discovery Life Channel.

Abruzzese, 68 years old, has outlasted many fads, and he believes Madison Avenue is rethinking the value of digital commercials compared with what they get on TV. He knows the ad business is changing at what seems like light speed, but believes “as an industry we overcorrect. We overcorrect on digital and social,” he said “Eventually, it comes back to the proper point. It takes a couple of years. I think we are at that stage now.”

Indeed, many TV executives believe the industry could be poised for its best upfront since 2011. TV continues to face audience erosion brought on by streaming video that beams across the rival screens of laptop computers, mobile tablets and smartphones. Yet in 2016, there are good signals: Advertisers are growing impatient with digital media, frustrated by ad blocking and click fraud. Meanwhile TV advertisers purchasing so-called scatter inventory, or ad time bought closer to air date, have found that prices have risen steeply since they bought similar ad time in the upfront market. When that dynamic occurs, advertisers typically move briskly to lock in prices so as to avoid hikes as the year progresses.

Abruzzese thinks his experience helps him outlast the fads and advertisers’ desire to peel dollars away to experiment with something new. Years of handshakes and dinners with clients and ad buyers makes it easier to do bigger deals, and even craft nontraditional pacts. He remembers working with Bill Cella, an ad executive who once wielded great power on Madison Avenue as the arbiter of how clients of Magna Global, a large ad-buying company owned by Interpublic Group, would allocate their money. The two were supposed to attend a black-tie dinner, but instead sat around in tuxedos working through the evening over cigars and drinks to plot a massive deal worth hundreds of millions of dollars involving 16 different advertisers.

“Without a relationship like that, that would take you three weeks of negotiating every deal,” said Abruzzese. “When you have those relationships, it doesn’t.”

Abruzzese hails from a culture where TV networks built connections to advertisers that were hard to fray. These executives weren’t openly trying to strong-arm money out of an advertiser’s pocketbook (talks about price came later), but rather get to know their strategy better so as to be at the ready when the time was right. At Walt Disney’s ESPN, Ed Erhardt, president of global sales and marketing, is known to dash off flurries of notes to sponsors based on news articles he comes across that mention their business. CBS ad-sales chief Jo Ann Ross tries to avoid leaking prices for commercials for big events to the press so as to work with clients on bigger packages without pressure over the discussions.

Even that deep rapport with important players is being challenged by new ways of doing business. The tenure of a chief marketing officer at a major advertiser is much briefer than it was in past decades, which means most plans don’t last very long before a new executive arrives to shake up strategy. Once you get used to a handshake, there’s suddenly another hand across the table. The average tenure for a CMO slipped to 44 months in 2015, according to an annual study of the nation’s 100 biggest ad spenders by Spencer Stuart, compared with 48 months in 2014. The median tenure fell to 26.5 months, compared with 35.5 months in the year-earlier period.

“There were clients like Larry Flanagan who ran marketing at MasterCard for many years. He knew what worked and what didn’t work,” said Abruzzese. “Now, our business is evolving much faster and people are constantly moving.”

And media companies, noticing more significant fluctuations in advertising revenue, are casting about for new ways to keep the money coming in. Abruzzese for many years reported directly to David Zaslav, CEO of Discovery Communications. Last fall, the company brought in Paul Guyardo, a marketing executive who has worked for DirecTV and Kmart, as its chief commercial officer. He now oversees everything from U.S. ad sales to digital media to licensing and research.

If that move causes any change to Abruzzese’s routine, he isn’t showing it. There’s a prominent ad-buying executive in town who wants to talk strategy over cocktails. There’s a dinner for a client who wants to create special ads that tie in to Discovery programs. There are still deals to be made. So Abruzzese gets ready for the next meeting.