The TV trade group was the source of the FCC’s recent recommendation that the federal government divert its advertising dollars from the national media to local media. And TVB didn’t stop there. Now it’s hard after the government money. For starters, it’s trying to get a better accounting of exactly how much money there is and where exactly it is coming from. Then it’s off to Washington. TVB has to convince the bureaucrats not only of the efficacy of local media, but of the relative merits of local TV. Good job.
How would you like another 5% on your top line?
Well, you might just get it (or something close to it), thanks to the initiative of the TVB and the perception and astuteness of the FCC.
Let’s start with the FCC.
Last month, the agency released its study on what might be done to bolster local media and the journalism it produces. The Information Needs of Communities: The Changing Media Landscape in A Broadband Age was written by Steve Waldman, an ex-journalist that FCC Chairman Julius Genachowski had brought in for the job.
Among its key recommendations: The federal government should divert its advertising dollars from the national media to local media. “Targeting existing federal advertising spending to local news media could help local news media models — both commercial and nonprofit, online and off-line — gain traction and help create local jobs, while potentially making taxpayer spending more cost-effective.”
Nobody right now has a good handle on just how much the feds spend on advertising, but the FCC and others think it’s around $1 billion.
Much of that comes from the Defense Department and its recruitment efforts. But other spenders include the national parks, Job Corps, the U.S. Postal Service, Health and Human Services, the Department of Transportation and the Veterans Administration. In 2010, the U.S. Census reportedly dropped $128 million as part of its head-counting campaign.
And according to the FCC and the TVB, most the money now goes to the broadcast and cable networks and other national media. TVB thinks the locals now get 10% at most.
So, if local media are getting just $100 million of the $1 billion federal spend, they are not getting $900 million, which amounts to just about 5% of the $19.4 billion in TV station revenue this year.
That $900 million or 5% then is the prize.
When I first saw Waldman’s recommendation, I made a note to ask TVB just what it was going to do to exploit it. A recommendation is only that unless someone takes action.
When I finally got around to contracting TVB this week, I was surprised to learn that not only was it working on the recommendation, it was the source of it.
On April 15, as the Waldman and his team at the FCC were wrapping up the project, TVB President Steve Lanzano sent Waldman a three-page letter suggesting that the government focus its advertising on local media. It’s in the public record.
In the letter, Lanzano also makes the case for why local television should be the particular local medium of choice:
Local TV can save the government money. Network TV time is 29% more expensive. “In fact, utilizing non-network dayparts in addition to the standard network dayparts, an advertiser can achieve even greater savings than the 29%….”
Local TV allows the government to target advertising to markets where it will do the most good. “Because nearly every product or service has some sort of geographic skew, this ability can greatly enhance the effectiveness of the advertising. Additionally, local media properties, particularly local television stations, offer the advertiser the ability to create local sponsorships that can help tie the advertiser to the local interests and concerns of each community.”
Local TV gives government advertisers more flexibility. They can cancel ads in one market and move them to another “on a relatively immediate basis….The advertiser has the ability to ‘heavy up’ and ‘lighten up’ the … spend in direct relationship to the campaign’s performance goals, thus permitting the campaign to be undertaken more effectively over time.”
Local TV is not difficult to buy. National sales reps “represent broadcast stations in markets across the country and streamline the buying process.”
What I like about the pitch is that it is not a hat-in-hand appeal. Rather, it’s based on the strength of local TV — that it can save the government money or at least give it more bang for the buck. There’s a lot of budget cutting going on in DC these days.
That the spending would also help support hard-pressed local media and journalism is the sweetener.
On the phone yesterday, Lanzano told me that TVB is already hard after the government money. For starters, he says, it’s trying to get a better accounting of exactly how much money there is and where exactly it is coming from.
Then it’s off to Washington. TVB has to convince the bureaucrats not only of the efficacy of local media, but of the relative merits of local TV, Lanzano says.
TVB is willing to share the $900 million with other media only to the extent it has to. “We can make them more targeted and more efficient by moving those national dollars to local TV,” he says. “I don’t think you can make the same argument with newspapers.”
At the same time, he says, TVB is trying to enlist the help of Waldman in contacting key lawmakers and making the public policy argument that spending locally would also result in better local journalism. Ultimately, Congress is behind all the spending.
TVB must also assure the lawmakers that the money would be spent on a nonpartisan basis, Lanzano says.
I’m not sure just how TVB could give such assurances. If anyone is going to play politics with the money, it would be the lawmakers themselves. They are all adept at directing federal money to their home districts or states. How do you think the FBI’s fingerprinting repository ends up in Clarksburg, W.Va.?
I don’t know what broadcasters can do about that, except hope it doesn’t happen. (I guess I must admonish broadcasters not to approach their representatives with attempts to direct money to themselves. That can only screw things up for everybody.)
Lanzano says credit for introducing the national-to-local idea into the Walden project belongs to TVB Chairman and Gannett Broadcasting President David Lougee and the lawyers at Covington & Burling.
But kudos to Lanzano and his TVB team for the follow through and for taking the lead in trying to turn the recommendations into some badly needed broadcasting dollars. TV stations may not get a billion (you do have to share), but several hundred millions would look nice on the top line.
And kudos to Waldman and the FCC endorsing the idea and recognizing the win-win. Using local media would benefit local journalism and make the advertising more efficient and effective.