You’ve seen them. Those political ads on TV. You’ve seen them over…. and over… and over… and over. Perhaps you’ll join me in celebrating that the election is finally here and the torture is over? That’s right; it’s Election Day, so stop reading blogs and go vote if you haven’t done so!
While dedicated citizens head to the polls to decide the fate of political hopefuls, there is already a big winner in the 2010 midterm elections: local television stations… and at a time when most could really use it. Since 2008 revenue for local TV advertising has dramatically slowed, particularly in the lucrative automotive category.
The current U.S. political atmosphere has spurred record ad spending this election season, which Opensecrets.org reports could top out at a record $3 billion this year, 300 million more than the last midterm election season and more than during the 2008 presidential election year. With thirty-seven governor’s races and hundreds of seats in the House and Senate up for grabs, campaigns have been pouring money into local TV advertising in just about every state. The New York Times says “discontent with incumbents and with Obama administration have put scores of formally safe seats into play, opening a spigot of campaign cash in local TV markets that are not accustomed to it.” That’s especially good news for large media conglomerates (like Gannett and Tribune) that own both newspapers and television stations; Gannett owns both the Arizona Republic and KPNX-TV (12 News).
Political advertising revenue will account for more than 11 percent of total ad revenue at local TV stations this year according to Magna Global, who tracks ad spending. That’s up from 7 percent in 2006. Excluding political ads, local TV revenue fell from $16.1 billion in 2008 to $13.8 billion last year- a 15 percent dive.
For California TV stations, particularly those in LA, the midterm frenzy has been a true gold mine. The LA Times reports that the cost of a 30-second TV spot has been soaring; a 30-second spot that went for $2,000 two years ago is going for $5,000 or more. According to Wells Fargo Securities, L.A. stations had collected more political ad revenue this year than those in any other market — more than $105 million — by the third week of September and could take in as much as $150 million by the time the votes are counted. Watchdog groups have reported that total ad spending by campaigns in Arizona are near $12 million – a large chunk of that to TV stations in Phoenix and Tucson.
As a result, some local businesses have been lost in the political squeeze. One local media buyer I spoke with said many smaller clients wanting local TV advertising are putting it off until 2011 because immediately after the election begins holiday advertising, and rates probably won’t go down until after the New Year.
Do you have a client that has been affected? If so, how did they adjust advertising strategy?