Slow Presidential Spending Reducing Political Forecast - Broadcasting & Cable

Slow Presidential Spending Reducing Political Forecast

Analyst Wieser says ad growth slower because of lack of Republican fund-raising
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A lack of fund-raising and spending by Republican presidential candidate Donald Trump has analyst Brian Wieser of Pivotal Research cutting his forecast for political advertising spending growth.

Looking at data for August from Advertising Analytics, which tracks political ad bookings from station owners in real time, Wieser says that third quarter political bookings were up 35% from two years ago and year-to-date bookings were up 41%.

Though those numbers are encouraging, “the big question for station owners at this point in time is the degree to which spending growth will hold up through the crucial fourth quarter,” Wieser said in a note Sunday night. “A key wild card lies in advertising associated with the Presidential race.”

Wieser said that there has been relatively little fund-raising on the Republican side, leading to less spending. The two major party candidates—Trump and Democrat Hillary Clinton—have spent only $139 million, compared to $423 million by the Obama and Romney campaigns through August 2012.

“Some incremental spending may boost markets that are newly in play during this election – either for the Presidency or for Congress – and we note that station owners may be encouraged that ad revenues have been strong so far this year despite the modest Presidential spending. However, we think it seems reasonable to assume that the aforementioned fund-raising issues will have some negative consequences for local TV,” Wieser said.

Wieser had been forecasting that political ad spending would be up 20% from 2012 and 40% from 2014. Now he says spending growth could be just 10% compared to 2012 and 20% to 30% compared to 2014. That would put total spending up $3 billion, amounting to 15% of local TV advertising activity for the full year.

There is a large disparity in how political spending is impacting the large station groups, Wieser said, with the NBC station group racking up big gains, while spending on Fox stations is down from two years ago.

According to Advertising Analytics, third-quarter bookings are up 70% at E.W. Scripps, up 11% at Media General, up 35% at Meredith and up 8% at Tegna. The ABC station group is up 98% for the quarter and 11% year to date; CBS-owned stations are up 38% for the quarter and 71% for the year, NBC stations are up 119% quarter to data and 41% year to date. The Fox owned stations are off 7% for the quarter and down 41% year to data.

Fox’s bookings are affected by the absence of a governor’s race in Texas, a strong senate race a year ago in Georgia and limited spending in Detroit.

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