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Political Ad Market: From Feast To Famine

In DMA 56, Little Rock, Ark., spending on election campaigns is sparse. The presidential candidates are ignoring the state because Mitt Romney has a lock on its six electoral votes, and there are no major state offices up for grabs. But it’s a much different story in DMA 69 — Roanoke-Lynchburg, Va. — where stations are having trouble coping with the enormous demand for time.

“I think the biggest candidate money we’ve seen so far is from a North Little Rock judge race,” says Mark Rose, GM of KATV Little Rock, noting that each of the two candidates in the nonpartisan contest have spent a few tens of thousands dollars for ad time. “We haven’t seen much presidential money since [former Arkansas Governor and then President Bill] Clinton.”

In this year of record political advertising spending, DMA 56 has been mostly bypassed and forgotten by candidates and their supporters.

The presidential candidates are ignoring Arkansas because Republican challenger Mitt Romney has a lock on its six electoral votes, and there are no major state offices up for grabs.

Even the open seat of retiring Rep. Mike Ross (D) in the southern part of the state hasn’t produced much ad spending, with the GOP candidate seen as having an insurmountable lead and the Democrat unable to raise much money. The state’s three other Republican incumbents in the House are breezing to re-election.

But that’s how it goes with political advertising every even-numbered year. Some markets — like Little Rock — are virtually shut out, and some in presidential swing states with closely contested gubernatorial or U.S. Senate races and possibly local elections — like Roanoke-Lynchburg, Va. (DMA 68) — have trouble coping with the enormous demand for time.

“It’s like putting 10 pounds of stuff into a five pound bag,” says Jeffrey Marks, GM of WDBJ Roanoke. As the top-rated news operation in the market, Marks figures his Schurz-owned CBS affiliate gets north of 40% of the political spending in the market, but that still leaves a big haul for the other stations as well.

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The market’s previous record of $5.6 million in political spending set in 2008 was shattered during this summer. Marks is now estimating that the presidential race — including not only the Obama and Romney campaigns, but also the big-spending super PACs — will generate more than $14 million. Add to that $3 million-plus from a red-hot U.S. Senate race and millions more from other contests.

Those estimates are in line with those of Randy Smith, GM of Allbritton’s WSET, the ABC affiliate in Roanoke. He’s projecting that the final tally for the market will be between and $20 million and $21 million.

That’s huge for a market where Marks says the TV stations and local cable operators get between $40 million and $50 million of ad spending in a non-political year.

“We thought it was going to be a white-hot year,” says Leesa Wilcher, GM of WSLS, the NBC affiliate owned by Media General, “but nothing like what we have…. Our inventory is tight, tight.”

The GMs saw early on that the Citizens United court decision, allowing unlimited fundraising and spending by independent political groups, was going to have a big impact on the Roanoke-Lynchburg market this election year.

“We have a rate card for issue advertisers,” explains Marks. “We limit the amount of issue advertising we want on the air. So the supply and demand function for them is different.”

That’s allowed WDBJ to keep many of its regular advertisers on the air, he says. The political advertisers “all want in. We’re not going to sell every commercial in every break to the [super PACs].”

But nonpolitical advertisers are being patient. “We maintain a heavy schedule with all of the stations, so they’ve got a pretty mature attitude that on Nov. 6 my company will still be here, but Karl Rove will have gone back into his hole,” says Steve Davis, VP-advertising, Grand Home Furnishings, which has six of its 17 stores in the Roanoke-Lynchburg DMA. “We’ve been getting good placement and good makegoods wherever we’ve had them. It hasn’t been too bad.”

But like a lot of other viewers, Davis would like to see an end to the political advertising. “I mean, you can go to a commercial break and have four or five spots in a row which would be political. There might be candidate spots. There might be PAC spots. Sometimes that’s all you see.”

“I’m pleased that we’ve had as little disruption as we’ve had,” says WSET’s Smith. After seeing advertising aimed at the general presidential election in April, he says, his station began meeting with advertisers to tell them what to expect — and that they might want to reschedule heavily advertised events set for October or early November.

Right now, Smith says two-thirds of WSET’s billings and 40% of the spots on the air are political. The super PACs are paying “major rates,” but regular advertisers are still on the air. Come Nov. 7, he expects to be running some makegoods for bumped spots, but says most of those have been taken care of in the course of business.

Even though the election will be over next month, Smith expects issue advertising to be back when the Virginia legislature convenes in January to take up whether to resume uranium mining in the state. Also, the governor and other state races are on the ballot in 2013.

Back in Little Rock, the political advertising arithmetic is a lot different than it is in Roanoke. Thanks to issue advertising on taxes and on whether to permit medical marijuana, Rose believes that the total political take will top at about $1 million, not much for a market that does $68 million in regular advertising.

When he drew up his 2012 budget, he says, he was projecting $750,000 in campaign-related political spending for the market. Now, he says, he’ll be “shocked” if it’s even in the $300,000 to $400,000 range.

At Nexstar’s NBC-MNT duopoly, KARK-KARZ, GM Mike Vaughn is a little more optimistic. He thinks the Little Rock market will end up with $1.2 million to $1.3 million.

Still, it’s nothing to get excited about — and a far cry from $17.2 million in 2010, when incumbent Senator Blanche Lincoln didn’t sew up the Democratic nomination until a runoff election, but was then beaten in the general election by Republican John Boozman.

Having previously worked in Springfield, Mo., Vaughn was surprised when he moved back to his home state of Arkansas several years ago. “Where’d all the political go?”

Even without a political windfall, KATV’s Rose says, business is “fantastic” in Little Rock, with ad spending up 5% this year. And he’s looking for a bigger piece of political spending in 2014. “It should be a pretty decent year for us,” he predicts.

Gov. Mike Beebe (D) can’t run for a third term and several candidates in both parties are eying that seat. Rose also expects hot contests for lieutenant governor and attorney general.

Sen. Mark Pryor (D-Ark.) will likely be defending his position as the only Democrat representing Arkansas in Washington, making the seat a hot target for Republicans.

KARK’s Vaughn is also looking forward to 2014. “I hope that they’re close. That’s what we’re always looking for — close races.”


Comments (4)

Leave a Reply

Jeff Groves says:

October 31, 2012 at 8:10 am

My heart goes out to those who have the misfortune to live in “Battleground States”. Thank Heaven for DVDs, DVRs and other recording devices that enable people to avoid these monstrosities. I’m sure on November 7 we’ll all be welcoming the Christmas Ads with OPEN ARMS!

Ricky McCray says:

October 31, 2012 at 8:13 am

As bad as the political ads are, it’s welcome revenue for TV Stations.

Jay Miller says:

October 31, 2012 at 12:29 pm

Maybe this will be a wake up call to those corporate ceo’s/coo’s who see a political year,salivate and pile on the unrealistic $$ in revenue that their stations will never achieve costing their GM’s their bonuses because expenses can never be cut that much to reach their BCF budgets!!!!!!!

kendra campbell says:

October 31, 2012 at 12:58 pm

The real word will restart in two months.


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