Local TV

Networks, Affiliates Solidify Spot-Swap Strategy

Super PACs, candidates may spend $3B on TV, and everyone wants their piece 10/01/2012 12:01:00 AM Eastern

The crush of 2012 political ad spending,
forecasted to be as much as $3 billion by Kantar/
CMAG, has compelled TV networks and their
partner stations to modify the spot-swapping concepts
that helped enrich both in the 2010 midterm elections.
At the fore is ABC, which two years ago debuted its Inventory
Exchange System, designed to make the most
of demand for spots around election time and boffo
shopping days such as Black Friday. With Rebecca
Campbell, president of ABC’s owned stations, playing
a key role, ABC and its affiliates have expanded the mutually
popular concept as this election season heats up.

As part of ABC’s Local Political Avails (LPA) model,
stations in high-demand political markets that find
their inventory sold out prior to Nov. 6 can request up
to 40 additional 30-second avails from the network,
to be used solely for political spots, which would then
“cover” a network promo. “The use of network positions
is only permitted when a station’s normal local
inventory is completely unavailable because of prior
sale,” ABC said in a memo to affiliates.

While affiliates of any network rarely get a free lunch,
ABC actually gives away the extra spots—both as a
boost to its owned stations, and as what affiliate leadership
sees as a goodwill gesture.

The latest chapter of ABC’s inventory exchange saw
affiliates offered a package of 22 primetime and 98 nonprimetime
spots at market price. The whole of the affiliate
body decides on the offer, which “triggers” if enough
opt in. One slated for this fall did indeed trigger.

“The ABC Inventory Exchange System is another example
of how the affiliates, owned stations and the network
are working together to find innovative ways to
collectively generate more revenue,” Dave Boylan, ABC
affiliates board chairman and VP/general manager of
WPLG Miami, said in an email. “In the past few years,
we have all come up with some very strategic ways
to exchange commercial inventory that respond to the
demand cycles of both the network and local stations.”

CBS also is preparing for the crush of local political
spots. Starting four weeks out from Election Day,
affiliates get one spot from the network each night in
primetime. They have from Election Day until the end
of the year to return the prime spots to the network.

“It’s a very good deal for affiliates, particularly those
guys in swing states,” said Chris Cornelius, CBS affiliates
board chairman and president and COO of Barrington
Broadcasting.

The four weeks’ worth of nightly spots is an expansion
from the two weeks CBS offered during the 2010
election season.

One key difference between the CBS and ABC deals
is that the CBS arrangement is all-in for affiliates, as
opposed to a station being free to choose. Cornelius
says the majority are in a position to benefit. “Some
don’t need it,” he said, “but generally there’s not a lot of
discord about this deal.”

UPDATED: On September 7, NBC offered affiliates an additional 31 primetime avails to be used up to Election Day, with affiliates paying back 29 of them after the election. (The extra two, for the Sunday Night Football pre-game show, are a gift from the network.) On October 1, NBC also put an NBC Nightly News ad unit up for sale for its partner stations, to be used up to Election Day.

Jordan Wertlieb, NBC affiliates board chairman, did not return requests for comment .

NBC also partakes in creative spot-swapping outside
of election season, including its “9 for Prime” arrangement,
in which affiliates have the option to trade nine
non-prime avails for a single primetime spot. The network
is also giving affiliates a 60-second window—for
news, not spots—coming out of the first commercial
pod in NBC’s Election Night coverage. “Please use these
minutes for your own coverage of important local and
state races,” said an NBC memo to affiliates.

Fox, meanwhile, is in a different boat because its affiliates often do not have the full slate of local news
that political ad buyers desire. “This hasn’t been on our
radar screen like it has been for the Big Three,” said
Steve Pruett, Fox affiliates board chairman and CEO of
ComCorp of America.

Fox does have a spot-dealing program in place for
NFL games, where affiliates can purchase extra avails,
then share the revenue with the network.

The network and its affiliate leadership will see how
the various strategies go down at ABC and CBS, perhaps
introducing their own model the next time politicians,
and Super PACs, start spending like parolees on payday.

“As the Fox affiliates add more news, the topic will
certainly rise,” said Pruett. “I think it makes sense.”

E-mail comments to mmalone@nbmedia.com
and follow him on Twitter: @BCMikeMalone

Want to read more stories like this?
Get our Free Newsletter Here!
August

Cloud Summit

Raleigh Marriott City Center, Raleigh, NC

October