Politics On-Demand

Cable ad executives bank on windfall of political spots

As another election year heats up, cable advertising managers are hoping that a full slate of contests, increased viewership and new on-demand advertising technologies will prove the adage that all politics is local—at least as far as advertising is concerned.

“We're expecting a healthy year,” says Ed Dunbar, VP of strategic integration for Comcast Spotlight, the ad-sales arm of the largest U.S. cable company. For starters, there are 36 gubernatorial races this year compared with just 11 in 2004. With so many candidates for state office, Dunbar figures this will be a record year for political-ad spending on cable, surpassing even the high-profile races two years ago.

The last election year was a watershed for political advertising on cable. Both George W. Bush's and John Kerry's presidential campaigns showered record sums on interconnects and local cable systems late in the race.

According to TNS Media Intelligence's Campaign Analysis Group, spot-TV sellers collected a record $1.27 billion in 2004, more than half of which ($724 million) came from non-presidential campaigns for federal, state and local offices. (TNS Media didn't measure local-cable advertising specifically). Radio and newspaper advertising accounted for less than $150 million in total political-ad spending.

“Undecided voters in swing states made local and cable advertising an especially important part of both campaigns' strategies and resulted in record spending in these media,” said Evan Tracey, TNS Media's COO, in announcing its analysis of the 2004 political-ad market.

Growing Cable Electorate

Even without a presidential race this year, Dunbar and others expect to see an increase of 10% or greater in total political spending, propelled by the tripling of gubernatorial races and the contests for U.S. House of Representatives seats.

Indeed, the audience for cable ads has grown since the last election, with significant chunks of TV viewers migrating from broadcast-network affiliates. When voters reelected Bush president in November 2004, the aggregate share of prime time TV viewing produced by ad-supported cable networks was 51.6 %, according to the Cabletelevision Advertising Bureau's analysis of Nielsen Media Research data. By November 2005, the share had climbed to 53.4%.

Cable operators also have grown more comfortable with the regulatory vagaries of political advertising well known to broadcast stations, says Dunbar. The greater familiarity that account executives have with unit-rate regulations and requirements for making ad inventory available on equal terms to candidates, he says, the more likely candidates will do business. “The most important thing, besides being familiar with what our product is,” he says, “is to be absolutely conversant with the rules and regulations that govern political advertising.”

New Platform for Candidates

This year also marks the debut of on-demand advertising in the political arena. Cable advertising executives are hoping to entice candidates away from over-the-air venues with the ability to plant long-form messages on cable video-on-demand (VOD) platforms.

“We talked about [VOD] in 2004, but we really didn't have it fully baked,” says Larry Fischer, president of Time Warner Cable Media Sales. “And consultants weren't ready to hear the pitch. I hope that's changed.”

He suggests that on-demand ads offer an increasingly jaded public an alternative to 30-second political spots that are often long on attacks and short on substance. “I think the more information that's available to all of us—the sort of the Jeffersonian notion of an educated electorate—and the more we can hear it first-hand, the more reasonable and responsible judgments we're going to make.”

Systems operators—among them, Cox Communications, Comcast and Time Warner Cable—plan to pitch VOD as a way to supplement 30-second spots with detailed profiles that aim to give voters a deeper perspective on candidates and their positions.

“In VOD, there's a unique opportunity to create a video vehicle that is really well-suited to the political arena,” says Steve Cunningham, a Denver-based cable-industry consultant who advised national spot-cable rep firm NCC on political-advertising strategies in 2004. “It's probably a real competitive advantage for the cable industry.”

Comcast Spotlight began promoting two VOD offerings to candidates and political media consultants in April, but none have been sold on the still-unproven medium as of mid-April.

Frank Caprio, a candidate for Rhode Island state treasurer, is offering a five-minute VOD clip on Cox's Freezone service as a part of his TV ad campaign on Cox systems. “Caprio sets standard nationally on a new form of advertising,” says a headline on the candidate's Web site.

It's not all PR, though, says Ed Valenti, a consultant who is advising Caprio on media strategy. “He's a relatively unknown candidate,” Valenti says, “and I thought, here's an opportunity to get to know why this guy's a great choice.”

Valenti, COO of Warwick, R.I., media agency PriMedia, regards the on-demand component as a supplement to Caprio's 30-second–spot buys across several cable channels. But he likes its potential: “VOD has an opportunity to make headway by offering lots of information that 30 seconds just can't.”

He should know. As a co-founder of Dial Media, Valenti was behind the product featured in one of TV's most memorable ads: the Ginsu knife.