Tapping Political Coffers
Campaign spending comes to local cable, but not in buckets
Campaign spending comes to local cable, but not in buckets
The snowstorm of political ad dollars now hitting local markets is about to become a blizzard, as the battle between President Bush and Sen. Kerry builds to November.
But, with more than $1.3 billion being spent on campaigns, including significant outlay by nonprofit advocacy groups and regional campaigns, the question is: How much money will go to local cable?
In a way, it's a new question. The old answer used to be: Nothing.
"The old rule of thumb," says Evan Tracey, chief operating officer for TNS/Media Intelligence's Campaign Media Analysis Group (CMAG), "was 70%-30% or about 80-20, with the 30 or 20 going to cable, in terms of media budgets. I wouldn't be surprised to see that go to 60-40 down the road. This [election], I think you'll see that in certain instances."
No ad-tracking service reliably measures spending on local cable, so anything more than a rough estimate is hard to come by. Most cable systems say they are actively going after political dollars, although most also note that local cable still lags well behind broadcast stations. As the saying goes, all politics is local, and broadcasters still seem to hit home better than cable, particularly when a politician can put his or her ad near a newscast.
But that attitude may be changing. "In the past, they may have thought of us as being good to reach people through our news networks," says Rick Oster, vice president and general manager at Adlink, the Los Angeles cable interconnect. "But the voters are watching all of our networks in record numbers, so we should be at the table when they are thinking about how to spend their money to reach voters." He notes, though, that, "as the shift [to cable] in viewing is occurring, the political advertisers aren't necessarily as active as regular advertisers."
Tom Feary, corporate director of marketing at Adelphia Media Services, agrees. But he also says there is reason for local cable to be hopeful: "In terms of the presidential race, we're not really seeing a shift at this time. But the Bush campaign bought a lot of national cable. With those efforts, we're anticipating a lot of local cable being bought as we get closer to the race."
Feary also points out that regional campaigns have been using local cable. Among them: Sen. Arlen Specter in his successful bid in a very tight Pennsylvania Republican primary race.
"My experience is that it depends on how hot the race is," Feary says. "I've seen that, when there is a hot race, there is a lot of local cable bought with state senate and gubernatorial races. Nationally, it's another story; we're still coming of age."
One reason political campaigns may start to ramp up ad dollars on local cable is simply that the medium has made dramatic improvements since the previous major elections, particularly the presidential election in 2000.
For one thing, there are now more cable interconnects, which group cable systems into one media buy, making cable comparable to broadcast stations.
Perhaps as significant, the perception of cable TV has improved as networks have invested billions of dollars on original programming. "Republicans learned two years ago that this is a vehicle that they can use to talk to their base," says Tracey. "It's no secret that young males have not been flocking to the [broadcast] networks' new programs. And between sports, entertainment, reality shows, news, and public-affairs programming, cable has a demographic that probably cuts more Republican than Democrat."
He adds that local cable's ability to target voters in small geographic areas should work to its advantage. "I've heard that, by the time we get to Election Day in the presidential election, they may have swing voters narrowed down to ZIP codes. If that's the case, that plays heavily to local cable's strengths."
And, although the new Nielsen local people meter will not have much impact this election, cable's ratings will presumably go up by the 2006 elections if Nielsen Media Research fends off criticism for its electronic measurement tool and installs it, as planned, in the top markets.
"Local cable TV is getting much more organized, which is why it's doing well," says Tom Wolzien, senior media analyst at Sanford C. Bernstein & Co.
Still, he says, local cable has challenges when it comes to securing political ads. "The bulk of campaign spending on television goes to the stations that have the strongest local newscast. So, while you can argue that local cable gives you much better reach than it used to and that you can target demographic groups, there's nothing on local cable that lines up the viewers most likely to vote, the way there is on local news."
CMAG's Tracey says local cable also suffers from the perception that it isn't quite as prestigious as broadcast. "Local-cable advertisers are people who are trying to reach a certain demographic or ZIP code," he says, "so you end up getting queued in with lower-quality advertising.
"I also hear, anecdotally, from consultants that you can't rely on cable alone," he adds. "You can use it like radio. You can buy formats or a certain group. But, if you rely totally on cable, you don't get anything more than the same people over and over. You don't get the undecideds like you get with a megaphone, like a broadcast spot."
Exactly how much political money local cable will get this election is hard to predict. But one certainty is that it will be more than anyone had figured when campaigning got under way late last year.
Wolzien forecast several months ago that political advertising would hit $1.6 billion on all media. That seemed a half million dollars high at the time.
In the months since, though, virtually every other forecaster has bumped up projections. Most now think political spending will easily surpass $1.3 billion.
"I wasn't nuts," says Wolzien, laughing. "I had two things that served as the foundation for that forecast. One is that the country has never been this polarized before.
"The second reason, which I think people missed last fall, is the '527 loophole'" that allows unlimited soft-money spending by nonprofit issue groups, such as MoveOn.org, for example.
By the time the election season ends in November, broadcast stations will have taken the vast majority of campaign ad dollars. But local cable will also have done well, most certainly better than in the past.
"Every national election seems to give birth to a new strategy or tactic," says Tracey. "I wouldn't be surprised if local cable is that in this election."