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ViacomCBS’ Daunting New Task: Twisting Itself to Please Madison Ave.

At CBS, ads have a chance to make a big splash on screen, whether they be a shout out to Sabra hummus from late-night host Stephen Colbert, a scene in “Hawaii Five-0” about Sweet Onion Teryiaki sandwiches from Subway or a bar sponsored by Anheuser-Busch and Heineken on the set of James Corden’s “Late Late Show.”

At Viacom, however, some of the most important advertising takes place behind the scenes. The youth-skewing cable programmer has spent months beefing up its efforts to help marketers like Pepsi, Procter & Gamble and General Motors places commercials in the programs and time slots seen by their likeliest customers –  all with the help of heady brews of consumer data and custom algorithms. And executives are placing more emphasis on using social media and an array of influencers, along with the advertising that typically accompanies TV programs.

Now the companies have to meld the two strategies into a cohesive offering.

“We are going to go to market jointly,” said Joe Ianniello, the executive who will supervise all of the CBS-branded operations that will serve as a strong engine of the new ViacomCBS, during a recent call to promote the merged company to investors.

The two entertainment conglomerates are slated to merge by year’s end. A combined CBS and Viacom will control 20% of national TV advertising, according to Standard Media Index, a tracker of ad spending, potentially opening new possibilities such as giving CBS advertisers access to the young viewers who watch Viacom’s Nickelodeon, or creating a package for late-night advertisers that includes not only CBS’ Colbert and Corden, but Comedy Central’s Trevor Noah and David Spade. The companies can also work together to boost new ad spending on streaming services Viacom’s PlutoTV or CBS’ CBS All Access.

But in years past, the two have worked separately. When Viacom and CBS were part of a merged entity before a 2006 breakup, CBS and the Viacom cable outlets were sold by different teams. A separate entity known as Viacom Plus, led by an executive named Lisa McCarthy, was in charge of creating ad packages that spanned across broadcast and cable. In one instance, McCarthy’s team put Tyson’s chicken products in CBS shows like “Still Standing” and “As The World Turns” as well as in video vignettes on Viacom’s Nick at Nite.

Such a stance would be harder to avoid in the current era. NBCUniversal has long had a single executive overseeing ad sales for its many assets. In the past year, Walt Disney tore down the walls between ESPN and its ABC and Disney outlets, making them part of one larger ad-sales operation. The same is true for Fox Corporation, which had long sold Fox News and Fox Business separately from Fox Broadcasting and Fox Sports. Now a single executive, Marianne Gambelli, supervises ad sales for all.

Marketers know that modern TV-watchers look at video across a panoply of screens. The current ad game still depends on reaching millions of viewers – but often is accomplished only by stitching together niches of audience identified by viewing behavior or by narrower purchasing attributes, such as whether someone might be in the market for a new car or is expecting a child.

To make that happen, the two companies will have to sell broadcast, cable and digital together, all the while using CBS’ biggest properties to snare the biggest amount of interest and highest prices, and drive new interest in Viacom’s fare.

To be sure, each side has expertise in the other’s strengths. CBS has explored technology, for example, that can send specific commercials to particular households in national programs using broadband connected televisions. And Viacom has tried multi-casts across many of its cable networks in an effort to nab bigger audiences for the MTV Video Music Awards, for example.

There’s room to grow. In a robust upfront sales season, Viacom only captured the same volume of advance commitments as it did last year, according to people familiar with the matter. CBS’ primetime volume was up 5% to 6%, compared with more than 5% for ABC; 8% for NBC; and 8% to 9% for Fox. Those figures do not include all sports sales done during the process.

And each company’s efforts could spur the other into new areas. Viacom is a member of Open AP, the consortium of media companies trying to make purchasing TV ads for narrower audience segments easier for marketers. To be sure, each side has expertise in the other’s strengths. CBS has explored technology, for example, that can send specific commercials to particular households in national programs using broadband connected televisions. And Viacom has tried multi-casts across many of its cable networks in an effort to nab bigger audiences for the MTV Video Music Awards, for example.

Still, there could be friction. Viacom just demonstrated positive ad-sales growth for the first time in five years. As the predominantly young viewers for Nickelodeon, Comedy Central and MTV have migrated to new kids of screens, the company over the years has been lambasted by media buyers for stuffing more commercials into ad breaks and for ratings declines – problems that have not one of the main challenges of the CBS broadcast network. CBS is largely accustomed to dangling big-audience TV shows like “NCIS” and “60 Minutes” in front of clients, not programming tailored for narrower viewer sets (the company does operate small cable networks like Pop. Smithsonian Channel and CBS Sports Network). With the companies pledging $500 million in cost savings, it’s not unreasonable to think some members of either side’s ad-sales department might be included in those figures.

The companies will also have to determine who should lead a combined ad-sales force. Two likely internal candidates would be Jo Ann Ross, president and chief advertising revenue officer of CBS Corp., and Sean Moran, head of advertising solutions at Viacom.  Both have years of experience, though Ross, the industry’s first female ad-sales chief, has spent more time as the head of an organization.

Ross has been at the helm of CBS’ ad outreach since 2002 – a remarkable feat, given multiple shifts in command during that time at WarnerMedia, Fox, NBCUniversal, Walt Disney, Viacom, Discovery and AMC Networks. At a moment when many media companies are placing more emphasis on getting sponsors to buy bigger and bigger packages of inventory, advertisers still value Ross’ word and handshake. Other companies like NBCUniversal like to pepper the media with announcements about potential offers and technologies. CBS prefers to negotiate with clients behind the scenes, and let the results show up on the screen.

Moran has logged years at Viacom, rising to head of national sales before taking the helm of the company’s ad sales in 2016. He has an easygoing demeanor and has developed a familiarity in some of the newer methodologies that interest clients, including influencer marketing. He has also been a big proponent of the data-driven ad placement that has occupied so much of Madison Avenue in recent years. Indeed, sales of the company’s Vantage data product doubled during recent upfront talks.

Amid many uncertainties, one thing is definite: Keeping the two companies’ ad efforts apart won’t play well on Madison Avenue.

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