How TV Stations Plan to Fight a Political Ad Hangover
This story first appeared in the Nov. 30 issue of The Hollywood Reporter magazine.
To see the impact on local television stations of nearly $3 billion spent in political advertising this year, consider E.W. Scripps, the 14th largest U.S. station group. With five of its 19 outlets in presidential battleground states (Ohio, Florida and Colorado), candidates Barack Obama and Mitt Romney (and their supporting super PACs) helped bankroll an ad bonanza. Scripps' political ad sales soared to $33.9 million in the third quarter of 2012, compared with $10.3 million during the same period of the 2008 presidential election.
On Nov. 6, that spigot abruptly closed up. The result, predicts Mark Fratrik, vp and chief economist for advertising analytics firm BIA/Kelsey, will be a decline in 2013 of 3 to 4 percent in local station revenue. "Clearly there is going to be less enthusiasm about advertising," says Fratrik. But he notes that the news is not all bad -- after all, some might assume a catastrophic drop-off outside an election cycle. During the final weeks of 2012, Fratrik predicts auto and holiday retail advertising will be robust, and some of the strength will be because of the election hoopla. "There was a large number of advertisers that decided to sit on the sidelines during the political window just because of all the press early on about how big it was going to be," says Michael O'Brien, vp and director of sales for Scripps. Stations were thus able to push ads to post-election slots. "They understood there was going to be some displacement," adds Bill Carroll, vp and director of programming for Katz Media. "Hopefully most of that business is going to come back."
The slight downtrend also will be buffered by the growth of digital, say experts. "That is our big driver going forward," says O'Brien. "The growth is in digital and cross-platform advertising (selling a broadcast-digital package)." Scripps also is pushing to generate new ad buyers, especially in the "services" sector -- everything from lawyers to locksmiths. Beyond that, there is 2014 to look forward to, plus a Winter Olympics and, given the Supreme Court's ruling in Citizens United, another round of super PAC-funded ads in 2016. "We're past this election," says O'Brien. "Local perspective is once again our No. 1 focus."