The Hill: TV stations strike election gold
BY MARIO TRUJILLO - 10/25/14 5:59 PM ET
Local television stations across the country are flush with cash thanks to a midterm election campaign that has featured an estimated $4 billion in spending.
More than 80 percent of the spending on political television ads is going to local broadcasters this year, according to one industry trade group. One media-tracking firm estimates that $2.4 billion could be spent on broadcast ads this cycle.
While candidates increasingly rely on cable and Internet advertising to reach voters, the bulk of their spending still goes toward 30- and 15-second spots on broadcast television.
Broadcasters have come to count on the annual spending barrage for a financial lift, said Scott Roskowski, chief development officer at TVB, a trade group representing the industry.
“When $2 billion in the aggregate comes into the marketplace that wasn’t there the year before, that is a pretty healthy margin,” Roskowski said. “So that is a good thing for local broadcast for sure. And it is a driver, no question, from a financial basis. It absolutely buoys us in the even years.”
Spending on broadcast television booms even during midterm years when presidential candidates are not on the ballot. Measuring just the first half of 2014, political ad buys jumped about 260 percent compared to the same time last year, with that percentage growing by the day.
The gravy train for broadcasters is even longer in presidential years.
Spending on broadcast ads in the presidential year of 2012, for example, totaled about $3.2 billion.
Still, spending in the 2014 cycle is projected to be slightly higher than the 2010 midterms, when $2.3 billion was spent, according to Kantar Media, which tracks the data.
Much of the spending this year is concentrated in the battleground states that will determine which party controls the Senate. Republicans, Democrats and outside groups are emptying their coffers in states like Alaska, Colorado, New Hampshire and North Carolina, to name just a few.
About 80 percent of all broadcast spending has taken place in just 65 of the 210 television markets, according to Kantar Media.
Dozens of competitive House and governor races are also boosting the ad-buy totals.
As David Axelrod, a former adviser to President Obama, noted in 2011, broadcast advertising isn’t “always terribly efficient, but you hit a lot of people” in key markets.
About $54.4 million has been spent on ads in the North Carolina Senate race between Sen. Kay Hagan (D-N.C.) and Republican Thom Tillis, according to an analysis from the Center for Public Integrity, which looked at broadcast, national network and national cable advertising. That was the most of any Senate contest this cycle, with more than 90,000 spots aired.
In Iowa, another crucial Senate battleground, one local station reportedly added an extra 4 p.m. newscast to make room for campaign ads in the final weeks before the election.
“Obviously if you are in sort of a purple state with a tight election race, then it can increase the bottom line considerably,” said Dennis Wharton, vice president of communication at the National Association of Broadcasters. “That doesn’t go across all state. It is 10 or 12 states.”
The surge of outside sending in the recent election cycles has given broadcast stations even more opportunities to rake in cash. While stations are limited in what they can charge candidates for ad time, there are no such rules when selling to outside groups such as super-PACs.
“It is a free market and whatever the market will bear,” Wharton said. “I don’t think they are going to ask for something that is so unreasonable that the third-party group won’t be interested in buying it.”
While broadcast remains king of the ad wars, some data-oriented firms say campaigns are throwing money away on broadcast spots that aren’t carefully targeted to different parts of the electorate.
Wharton and Roskowski said that argument doesn’t hold water.
“I read these stories about digital, online and cable. But if you really want to move the needle, you want to go where the eyeballs and earlobes, are and that is broadcast television and radio,” Wharton said.
Firms like the GOP-affiliated Targeted Victory, however, are wooing clients by touting more sophisticated technology to place ads on “television to mobile, from search, social and video advertising to demographic, behavioral and geographic targeting,” according to its website.
Broadcast should still be relevant, but not at the rate campaigns are currently spending, said Michael Beach, one of the firm’s cofounders.
“We are running these campaigns like it was 10 years ago in terms of how much money we are putting on broadcast. And that should be a large chunk. Even in a congressional that bleeds out, broadcast may be the largest chunk. It just may be 25 percent [not] 80 percent or 90 percent,” he said, noting the particular television market in districts will drive that.
Targeted Victory says it has focused much of its efforts on smaller congressional or state campaigns, finding ways to gets ads in top markets for a fraction of what broadcast ads cost.
The firm recently estimated that more than 70 percent of money used for congressional broadcast ads since Labor Day was wasted because the ads reached voters outside the House district.
Targeted Victory said campaign targeting has reached the “Moneyball era,” and it’s only a matter of time before candidates embrace it.
“I think a combination of the stories written after this election and an analysis of how resources have to be allocated, and the fact that everybody is fighting for the same space, should force people to be innovative,” said Jeff Mason, a senior director with the firm. “I think a lot of that will be driven by donors as well as strategists.”
