Last week, former Massachusetts Gov. Mitt Romney became the first major presidential candidate for the 2008 election to air a campaign ad. With the election season already off to an early start, the 60-second spot—which ran in Iowa, New Hampshire, South Carolina, Michigan and Florida—offered broadcasters a taste of what could reach upwards of $3 billion in political-ad spending.
And with several states looking to hold their presidential primaries earlier on the calendar, station managers are cautiously predicting that spending in
2007 will resemble an election year more than the year before an election. Stations in states like California, New Jersey and Florida could be in for a huge bonanza as a wide mix of candidates—some with vast war chests—prepares for long, brutal and costly campaigns.
“As I've heard it, the 2008 campaign starts in 2007,” says Tom Kane, CEO of the CBS Station Group. “It's going to take a long time to win. That's going to up the ante for candidates and inject more money in the TV business.”
In an effort to diminish the clout of Iowa and New Hampshire, the traditional election bellwethers, several states have scheduled primaries and caucuses for earlier in 2008. Nevada is scheduled to hold its caucuses Jan. 19, between Iowa's caucuses and New Hampshire's primary—and nearly a month earlier than in 2004; the South Carolina primary is slated for Jan. 29; and California, Florida and New Jersey (which held its 2004 primary in June) are among several eyeing Feb. 5.
As a result, Iowa Gov. Chet Culver has vowed to keep his state's first-in-the-nation status; New Hampshire will likely follow suit.
A blockbuster year
While the changes are proposed by the political parties' national committees, it's up to the individual state legislatures to decide; by some estimates, the nationwide primary schedule might not be finalized until summer.
Station executives and industry consultants say this bodes well for a blockbuster year of spending that will likely hit its stride by the fall. Research firm TNS Media Intelligence reports that the sum could be as much as $750 million in 2007. The Television Bureau of Advertising (TVB) predicts total campaign spending at over $3 billion—more than double what was spent for the 2004 election.
“Bringing the more populous states with big-media markets into the mix earlier has the most potential for broadcasters,” says TVB President Chris Rohrs. “That aside, it looks like an amazing early start to on-air activity, thanks to the openness and competitiveness of the race.”
Indeed, the field is wide open: For the first time since the 1952 election, when Gen. Dwight Eisenhower triumphed, neither an incumbent president nor a vice president is in the running. Some two dozen candidates are jockeying for position, of which eight to 10 could emerge as legitimate contenders. Candidates on both sides of the aisle have sizable sums to spend—and they'll need to: Political strategists say the tab for serious contenders could exceed $100 million.
And with so many primaries and caucuses occurring earlier, the home stretch of the campaigns—the period of intense spending after the primaries and before the election—will last longer.
For the stations in those new early-bird markets, expectations run high. “Everyone who's in it now has to look at Nevada as a serious place to be,” says Holly Steuart, general manager of Meredith Broadcasting Group's Fox affiliate KVVU Las Vegas. “We're optimistic that it's going to be good for us.”
With New Jersey looking to move its primary up, area station managers are hopeful. “The last election, the Democrats were so strong in [New York] that little money was spent,” says WNBC New York President Frank Comerford. “But if [former Mayor Rudy] Giuliani and [Sen. Hillary] Clinton are in it, it could be a real good thing for this market.”
Of course, what's good for Nevada and New York doesn't seem to bode well for the traditional early birds. After all, if campaign managers are shifting larger portions of their TV budgets to large, delegate-rich states like California and Illinois, it leaves less money for the smaller states. “There are multiple large markets [to reach] in those states,” says Kane. “I would think the candidates will be shifting a bulk of their money.”
But station managers in those traditional early-primary states are confident their roles won't diminish. If top-tier candidates are spending elsewhere, they argue, less-flush candidates may focus their resources on smaller markets. And should a candidate falter early on (remember Howard Dean's Iowa scream in 2004?), the showdowns down the road won't mean much.
“If a candidate doesn't do well in New Hampshire, then they don't have a track record to run on,” says Jeff Bartlett, president/general manager oft Hearst Argyle's WMUR Manchester, N.H. “So this remains an initial proving ground.”
Bill Hague, of media-research firm Frank N. Magid Associates, thinks all stations can benefit from the proposed changes. “There's so much more money in it [this time],” he says. “Think of it as $100 divided by five states instead of $20 divided by two states. The stakes are going to be huge, and I think the numbers will be up for everybody.”
Web plays significant role
Although TV gets the lion's share, the Web will play an increasingly important role in political spending. Local TV's online-ad revenue grew 41% in 2006 and is expected to jump another 55% this year, to $618 million, according to a study from TVB and Borrell Associates.
And with broadband video playing a vital part in the campaigns—both Hillary Clinton and Barack Obama announced their presidential ambitions through video presentations on their Websites—stations are happy to meet them on their digital terms.
Even if the promise of a spending spree doesn't deliver the expected windfalls, station managers agree that the long campaign at least will give their reporters plenty of news to gather.
“I don't know how it will impact us on the revenue side, but on the news side, it impacts us greatly,” says Emily Neilson, general manager of Landmark's KLAS Las Vegas. “We'll be much more aggressive in covering the campaigns.”
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