Political Ads on TV: Are Sales Going Down?

JEFFERSON CITY, Mo. – It seems like there are more campaign ads appearing every election, but as candidates turn to other methods, less money is being spent on TV. There are a number of things to remember about political advertisements, so here’s our breakdown:

Are candidates spending more?

Spending on political advertising has been steadily increasing for decades, and while it may seem like every commercial airing on TV is for a politician, the actual amount of money being spent may be falling.

Several groups had projected political spending to reach anywhere from $2.8 billion to $3.2 billion in 2016. But while those numbers seem high, it’s actually a drop from the 2012 election.

Ad-tracking agency Kantar Media projected the spending on local broadcast television to reach $2.8 billion. That estimate is about $300 million less than what was spent in 2012. Marci Ryvicker, managing director at Wells Fargo Securities, told the Wall Street Journal that their forecast for political spending was set at $3.2 billion, down four percent from 2012.

Sinclair Broadcast Group had been forecasting a record spending year back in August. Instead, they pulled their political spending forecast, lowering stocks across the industry. They weren’t the only ones to withdraw. Gray Television, Inc. also pulled their forecast.

Why is there a decrease in spending?

There are a number of reasons spending could be down, but the main reason believed to be behind the decreased spending is social media. Digital platforms have become an easy way to get in touch with voters, as they are relatively free and able to deliver messages to large target audiences quickly. In fact, Wells Fargo Securities estimated advertising dollars for TV to remain constant, while expecting digital to double.

But to many, television is still the most cost effective way for candidates to reach voters, since it delivers one single message to thousands of people at the same time, and it reaches an older generation that may not be using computers. That same generation tends to be the largest group of voters in previous elections.

The main reason to use television ads is simple: it’s a tried and true method. Television has been used for decades. The studies have been conducted, and not much has changed. In short, candidates know exactly what they’re getting for their money. For that reason, it’s the most reliable way to spread their message.

Can candidates still buy air time?

A little more than a week from the election, and the answer is yes, candidates can still to buy air time. But some say it’s not being bought at the same vigor as it had been in previous weeks.

Air time in a highly viewed time slot might be hard to find in St. Louis (DMA#21) and Kansas City (DMA#33), and even in the Columbia/Jefferson City market (DMA#138), but there are some available slots open. The problem is that the slots left open are typically not desirable slots, usually something along the lines of overnight weekends. Those slots will most likely be untouched, because it’s such a small audience watching at those times.

What can make things more difficult for politicians seeking to buy an ad right now are the rules.

Rules for Political Advertising

So that candidates can make informed buying decisions, the FCC requires that stations disclose material rates and terms of advertising to candidates. The best way to ensure compliance with the requirement is to prepare a political disclosure statement. It’s basically a rate card for their pricing, which should contain:

• the classes of time available for purchase
• the rates that will be charged for each class
• how and when a preemption may be made and the likelihood of preemption for each class
• payment policies
• any other selling practice that could reasonably affect political buying decisions.

Candidates are guaranteed the lowest unit rate, which means that whatever the lowest rate is on the books for that time slot is what they will get, but only in political protection periods only. These are 45 days prior to a primary and 60 days prior to a general election. Before those times, stations can charge basically whatever they think they can get away with.

Federal vs. State/Local

TV stations treat federal elections differently from state and local elections. There are more rules for the federal candidates’ advertisements.

Stations are required to accept ads from candidates running for a federal race, as they are entitled to “reasonable access” to buy spots. Stations must sell time to federal candidates throughout their campaign and cannot set any limits on the spot inventory made available to the federal candidates. This only applies to recognized parties, not third parties.

State and local candidates, on the other hand, do not have any right of access, so stations can set limits on their inventory and/or accept ads only for certain races, or decline ads. But, if a station accepts one candidate, they must treat all other candidates in the same race in the same manner.

Can candidates preempt each other?

There is some uncertainty among a number of people the Missouri Times approached on this subject, but it seems that the answer is technically, yes, a federal candidate can preempt a state or local candidate’s advertisement. It all boils down the order of hierarchy (federal ads trump state, state and local ads trump advertisements on the issues) and the money.

A candidate’s ad can still be preempted by another advertiser who is willing to pay a higher rate in the next higher class. As one account executive told the Missouri Times, “We go by levels. If every candidate (federal or state) is paying the same level but we are oversold in a certain time period, then the last candidate that went in the oversold time period gets bumped out first.  That candidate has the option to get back in that time period if they want to pay a higher level (rate) or we will make the money good elsewhere prior to their approval.”

An interesting nuance that another account executive explained is that many candidates will actually preempt their own spot just to guarantee their ad runs. That same account executive also said that the sales people will often advise local advertisers to avoid buying anything during elections, and advise them to wait until after the election to spend more during holiday seasons.

Who is the Winner?

Many stations can make more money selling these ads during election season, but to put it bluntly, as long as candidates are willing to throw money at TV stations to run campaign advertisements, TV stations will continue to profit. The real winner is the stations, because even if a normal customer is upset about their commercial being preempted, the station can still apologize, shrug their shoulders and blame it on the election.