Local Cable Enjoys Political-Ad Boomlet - Broadcasting & Cable

Local Cable Enjoys Political-Ad Boomlet

Executives: Pinpoint delivery leads to election-season windfall of several hundred-million dollars.
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Analysts are scratching their heads over why political advertising on TV has been light so far in measured national and spot broadcast-TV business. Local-cable-ad-sales executives said they've solved the mystery -- the missing money is going into their pockets.

If spending trends continue, local-cable-advertising executives estimated that they will finish with several hundred-million dollars in political advertising by Election Day, versus the tens of millions they accrued in the 2004 presidential election. With local-cable-ad volume not measured due to its fragmentation, the boomlet has gone under the radar of traditional ad data services.

“Our day has come and campaigns know that having cable as part of the media mix can make the difference between them winning or losing,” insisted Dan Sinagoga, director of political advertising at Comcast Spotlight, which sells local ads.

Sinagoga calculated that local cable is getting approximately 15% of the political TV ad spend, versus 4% in 2004 when cable interconnects were less developed. Non-cable media executives told B&C the growth increase for local cable's slice of TV spend seems plausible. Taking into account TNS Media's Campaign Media Analysis Group estimate of $3 billion in political TV ads in 2008 -- versus $1.7 billion in 2004 -- this percentage could translate into a roughly fivefold increase. CMAG doesn't measure local cable.

Regarding the increase, local cable ad execs pointed to cable interconnects' ability to deliver highly localized segments of an audience. This missile-like ability has become more important to national, statewide, congressional and local races, not to mention a boon for campaigns that don't wish to pay for wider broadcast TV geographic coverage.

As an example, 83% of New Hampshire households are in the Boston DMA, where TV stations are an expensive buy with most of their audience delivery out of state. Comcast Spotlight estimated that 82% of local TV spots leading up to the New Hampshire presidential primary in January ran on local cable -- presumably low-cost cable spots and higher-cost broadcast. As a result, its ad revenue in that primary soared 585% compared to 2004.

SPREADING DOLLARS IN NEW WAYS

Another factor in the increase is presidential campaigns' growing preference for spreading ad-buying dollars over a broader mix of basic-cable networks. In 2004, both the Bush and Kerry camps stuck mostly to news channels, ESPN and The Weather Channel in local cable buys. In 2008, presidential campaigns are also shopping at Comedy Central, Discovery, Home & Garden Television, Lifetime Television, MTV and Military Channel, depending on the targeted demographics.

“There's been a great expansion in the number of networks beyond news,” says Tim Kay, director of political strategy for big spot-cable ad cooperative National Cable Communications. Presidential candidates bought ads on 35 cable networks in the first six months of this year, versus 15 in 2004, an NCC study said.

Cable targeted the political category early, with NCC making separate presentations to the two main political parties last year. Their pitch boasted of offering local cable ads in larger metro areas. In the past, congressional candidates have traditionally relied on direct mail and print as their best targeted ad buys.

Time Warner Cable media sales president Joan Gillman says the Democratic Party leadership chose spot cable as its top TV medium for 70 congressional races. This, she believes, was due to local cable ads' ability to blanket the irregularly shaped geography of congressional districts, with audience delivery varying in parts of that geography.

Besides geographic targeting, local cable can deliver, by ZIP code, ethnic groups such as Hispanics via Spanish-language cable networks, or demographics such as household income. As Sinagoga said: “We're delivering frequency, and we maximize their budget with no spillover.”

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