TVN Focus On Advertising | More Political ‘Everests’ Ahead For TV

The two Senate election runoffs in Georgia could bring stations in that state and surrounding markets around $180 million-$210 million in additional political revenue in the next two months, according to Kantar/CMAG’s estimates. That “bonus” comes atop an already record-breaking political cycle, and indications that the next big election periods could trigger more revenue “Mt. Everests” for broadcasters.

Kantar/CMAG’s VP-GM Steve Passwaiter puts total media spend in Georgia over the next couple of months at $300 million-$350 million, with spot making up 60% of that. Although he says the Georgia estimate is a bit of a crapshoot “given what’s at stake and the limited time involved.”

While that’s uncertain, the high stakes are not. “This fight is for control of the Senate. So you’ll see both sides spending, but especially Republicans. If they lose the Senate, then they don’t have [majority control of] any branch of the federal government,” says Steve Lanzano, TVB president-CEO.

The Georgia Senate runoff elections, which take place Jan. 5, will affect more than just the stations in that state. “There are six markets that are either in Georgia or touch on it,” notes Mark Fratrik, SVP and chief economist at BIA Advisory Services. “There’s going to be so much money spent by the campaigns and third-party groups that every station in those markets, as well as local cable, will benefit.”

Fratrik speculated that because of that, some retailer holiday promotions could get crowded out.

Revenue tied to the battle royale in Georgia comes atop an already mind-blowing haul of dollars for the overall election. AdImpact (formerly known as Advertising Analytics) estimates TV station’s revenue, up to Nov. 4, at almost $4.8 billion out of a total media spend of $8.4 billion. Kantar/CMAG puts spot’s total political revenue at around $4.5 billion, out of a total $8 billion to $8.5 billion in the same pre-election-day period.

The 2020 windfall looks almost “silly” when it’s compared with past elections, Passwaiter says. “In 2018, the number was a little over $3 billion. So this would represent a 50% dollar increase over 2018 — when everyone was jumping for joy because of how big it was. And 2020 dwarfs 2016.” CMAG puts spot spending in that cycle at $2.85 billion.

One major factor in the 2020 results relates to the larger-than-expected number of states where political advertising was fierce. “We saw some fairly healthy spending going on in Texas, which I would not have predicted a year ago. We saw a sizable level of spending in Michigan, which we anticipated, but not to the level that we saw coming in,” says Emily Barr, president-CEO of Graham Media.

“We planned a 20% increase [over the last cycle]. We beat that,” says Frank Comerford, chief revenue officer and president of commercial operations for the NBCUniversal Owned Television Stations. “The Hispanic stations had huge, huge growth — high double-digit increases. The English-language stations had fairly sizable increases, too.”

Comerford notes that as a whole, spending tied to propositions was “huge” in California.

In terms of which state attracted the most political spending, “it’s a real toss-up between California and North Carolina. Both of those states did incredibly well,” Passwaiter says.

“There were a number of senate races that were over $100 million, just an insane amount of money,” Passwaiter adds. “Maine has 828,000 registered voters. And the total spent was around $150 million.

Spot drew over 56% of all political dollars as of Nov. 4. That was by far the largest share, with digital coming in at No. 2 with almost 20%, according to AdImpact. “Google and Facebook recorded $1.6 billion in spending,” says Kyle Roberts, CEO of the research firm.

“Of that $1.6 billion, almost a billion was spent on raising money [as opposed to urging people to vote for a certain candidate].”

AdImpact figures show that the biggest spot spender among presidential candidates was actually someone who dropped out early: Michael Bloomberg, who plunked down almost $344 million in spot deals for his Democratic primary. He was followed by Joe Biden at over $311 million and Donald Trump at $182 million in spot deals.

The vast quantity of money that candidates and their backers poured into certain states didn’t necessarily translate into victories. Consider that Trump carried Florida even though Democratic dollars spent by Biden and his supporters was $179 million across all media in the state, vs. $90 million for Trump, according to AdImpact.

Huge amounts of money were spent in Maine, South Carolina, Iowa and Kentucky, trying to unseat Republican Senators Susan Collins, Lindsay Graham, Joni Ernst and Mitch McConnell, respectively. But none of that paid off with wins for the Democrats.

“You can spend all the money you want. But if you don’t have a candidate whose views are in line with the electorate, can you drag that candidate across the finish line? I don’t know,” Passwaiter says.

While that may be debatable, observers say that over-the-top services will almost certainly continue to gain traction in future elections. “There has been a big appetite for OTT. The issue with OTT is, do you have enough scale?” Lanzano says. “I think there will be more money spent, but I’m not sure it will affect linear dollars. You still have to reach a ton of people. You still need the scale.”

Regardless of OTT’s results up ahead, it’s likely that spot will have another stellar year in 2022. “Usually the opposition party does pretty well in the House in the midterm. If that holds true, Republicans have a pretty good chance of taking back the House in ’22, given the fact that it’s just a few seats [to reach a majority]. In the Senate, the math may be a difficult one for [Senate majority leader Mitch] McConnell,” Passwaiter says.

Passwaiter predicts that if Congress remains divided, any campaign finance reform legislation is not likely to pass, and the Supreme Court might not think that it’s constitutional anyway. “If nothing changes, it looks like we’ll have a pretty big midterm,” he says.

As for spending in 2024, if Donald Trump runs again, “everybody get out of the way,” Fratrik says. “There are so many different variables. But on a global scale, the attractiveness of over-the-air political advertising [in this past election] bodes well going into the future.”