It remains to be seen if Michael Jordan, chairman-CEO of Westinghouse Electric Corp., will become an expert in running a TV network. But it's clear he is a marketer, and he's brought those marketing instincts to CBS. The former president of PepsiCo feels comfortable in the world of Madison Avenue and has a lot to say about brand advertising.
Advertising Age Media Editor Chuck Ross
I don't think brand loyalty stays over any sustained period of time. And older consumers are just as adventurous as younger consumers. In an environment where the consumer is constantly bombarded with new-product offerings, line extensions and so forth, [targeting young consumers for loyalty] is a fallacy, if it ever existed.
The whole industry needs to rethink media buying practices .*. . both in terms of where the advertiser is targeting consumers and how one accesses them.
Ad Age: This is a story CBS has been trying to sell to Madison Avenue for a long time. But advertisers say they can buy NBC and reach the CBS audience through spillover viewership on NBC.
Mr. Jordan: That's right. What we have to do, and what we're starting to think about, is that we offer more of the "non paid for" [age 50 and over] audience than any other network. That ought to be worth something. We have to find the right kind of economic inducements to say we can deliver you X more eyeballs and we'll give you guarantees. We're working on a lot of ideas to convince advertisers that we can produce value. Just complaining about the system doesn't work.
[Also] we obviously want to work to broaden our demographic, and we think we have the product that allows us to do that. For example, "The Promised Land." People say, "Well, that's an older skewing show." It skews old in numbers, but you do all the research and it's very broadly appealing. Especially to women 18 to 34. So we have the requirement to try and figure out how to bring those people into our franchise.
Ad Age: So you're looking to try to bring some younger skewing shows into the lineup?
Mr. Jordan: Our offering is not homogeneous. We will have shows that will be more younger-skewing. We have one in "Cybill." Everything is not going to be "Touched by an Angel" on the network.
Your ability as a network to produce programming with a wide variety of genres that can appeal to people is more important than everything looking the same, as we did with [a number of shows that were essentially] "Son of Friends" and fell flat on our face.
I personally believe that despite the shrinkage in the major network audience that everyone talks about and decries, network and broadcast television still dominates television advertising, and will continue to do so. In a fragmenting audience universe, the guys with scale are the guys that deliver the efficiency. And whether you're 55% or 75% of the audience, nobody else can deliver the efficiencies. As a major advertiser, there's no other way to put your base load out there.
Ad Age: Does CBS want to make any deals with advertisers to share costs in developing series programming?
Mr. Jordan: We would certainly be open to ideas that brought us good product and product that has built-in appeal to advertisers.
Ad Age: Do you want to get involved in marketing plans with advertisers across all your properties?
Mr. Jordan: Yes . . . unlike almost every other major standalone broadcasting company, we are advertising driven. If you look at local markets, at radio and television, we're the No. 1 local advertising presence in every one of the major markets.
Ad Age: Given how difficult it is to do these kinds of deals, is it the kind of thing where you sit down with a [Procter & Gamble Co. Chairman] John Pepper, and it flows from the top down?
Mr. Jordan: We don't have the answer to that. But it's usually up to a major advertiser to figure out that there's something he wants to accomplish by looking to merge local, network, spot, etcetera.
I think the [ad] industry is moving more and more back to brand building and even backing away somewhat from the excessive line-extension mania of the past 15 years. Because they realize unless it's really done with a very intelligent focus, the diminishing returns of that are really high . . . As a company we sit astride a lot of these avenues of reaching the consumer.
Ad Age: What's your position right now on liquor advertising?
Mr. Jordan: Our view of this-and we've said this to people in Washington-is that this is a ploy to get beer and wine advertising off television. It's not in the broadcasting industry's best interest to do that.
Ad Age: Where do you think we're going with the Internet? Some of your competitors believe strongly that there will be a convergence when we see good quality full-motion video on the World Wide Web.
Mr. Jordan: It's going to be difficult to figure out ways to get real money through this except as a promotional vehicle. To get revenues from consumers or advertisers is still questionable.
Ad Age: So you don't believe a convergence will happen?
Mr. Jordan: No, not really.
It's really the whole information interchange industry that's going to be most affected. I think it has secondary spillovers on the advertising and entertainment industries.
Ad Age: Where are you with cable right now? You've got Eye on People that's going to launch later this year. More?
Mr. Jordan: We're interested in the business.
The key to new channel economics has got to be advertising. Advertising is going to be your only realistic revenue [including] the growth of cable advertising, and the targeted use of cable advertising and the consistent demographic focus of cable advertising.
Ad Age: Now that the merger with Infinity Broadcasting and its radio stations is complete, do you see Mel Karmazin, chairman-CEO of CBS Radio, having a bigger role in the company?
Mr. Jordan: Mel's a stockholder and he'll be a director of the company. He's out there helping me pitch the investment community because he's very good at it. He's interested in the total company. He's terrific.
Ad Age: Do you see him getting involved more on the TV side?
Mr. Jordan: No. He'll be part of the top management and he'll have his say and input into major decisions.
Ad Age: What about a partner relationship with a studio? There has been talk that your endgame is to sell out to a studio.
Mr. Jordan: Two points. One, we think there are deals to be done that have benefits to both sides on a situational basis. We'll continue to look at that.
Secondly, the endgame. Look at this company we're creating. Some of our people internally said, "Well, after you get rid of some of the industrial headaches, which were maybe a poison pill, won't somebody come [after us]?"
They're going to have to write a check for well north of $20 billion to do so. Because that's what the stock is going to be worth and the debt is going to be worth. Any realistic takeover would have to be $20 billion to $25 billion.
Ad Age: So you don't see any players who could swallow you?
Mr. Jordan: You never say never in the wonderful world of Wall Street, but it seems highly unlikely.
Ad Age: Any closing comments?
Mr. Jordan: I would like to make a final point to your readers, who are my former colleagues in the peddling business. The industry is changing; we think CBS will change and improve. We'll try to get more consumers in the way the business is always measured.
We also want to work with [marketers] to find more effective ways to figure out how to spend their media dollars, whether that's targeting the older demographic in more realistic ways or selling them radio and television time in combination in local markets.
We're here to serve advertisers. That's our raison d'etre.