'Super’ Spending Spree Predicted on Road To Iowa
Broadcast Leads Pack, But Cable’s Getting More Notice From Politicos
By Stewart Schley -- Multichannel News, 5/6/2007 8:00:00 PM
A sluggish local-TV advertising market could put pressure on cable advertising groups to make their budgets and register decent-to-strong growth in 2007. But there’s one failsafe strategy available that could help spark a welcome surge in second-half billings: Do business in Iowa.
Experts expect a political advertising spending spree to begin there as Republican and Democrat candidates for the U.S. presidency crank up their ad campaigns in anticipation of the Jan. 14, 2008, Iowa caucus.
The Iowa vote tips off what political advertising experts believe will be an unusually competitive and well-capitalized presidential campaign season that could shower cable advertising organizations in key states with millions of dollars in revenue.
Candidates including New York Sen. Hillary Clinton, Illinois Sen. Barack Obama and former Massachusetts Gov. Mitt Romney, among others, have amassed large campaign war chests that analysts believe could propel television billings in general, starting as early as August.
Obama so far leads the Democratic field in fund-raising, with a campaign war chest of $25 million raised during the first three months of 2007, according to Federal Election Commission filings. On the Republican side, Romney leads the fund-raising pack, with $21 million contributed through March.
The fact that Romney’s campaign already has spent $12 million testifies to the urgency behind the primary positioning.
“I think the spending may start a little earlier this year,” said Steve Litwer, group vice president of advertising sales for Mediacom Communications’ OnMedia unit, which operates in Des Moines, Iowa. Litwer plans to travel to Washington, D.C., in early summer to begin courting campaign consultants and advertising strategists, and to present a new video-on-demand advertising platform that OnMedia believes could prove attractive to candidates.
'BIG POTENTIAL’
According to Litwer, it’s impossible to project the exact timing or the possible contribution of political advertising dollars, but he said the VOD platform offers cable a potential advantage the medium didn’t have in 2003-2004. “The potential is so big, especially in Iowa,” he said.
Cable ad sales reps began to introduce on-demand advertising to political candidates and advocacy groups during the 2006 mid-term election cycle and hope to build momentum by pitching the medium as a way for candidates to express more than simple sound-bite messages.
“If they can come up with the right kind of messaging, there’s no better place than in a living-room environment. Especially when somebody’s trying to convince you of a political argument,” said Kenneth Little, executive vice president of technology and operations for the cable industry spot advertising rep firm National Cable Communications.
TRADITIONAL SPOTS
The mainstay of cable’s 2007 political presence, though, will be the traditional 30-second spots that make up the bulk of candidate and issue-advocacy advertising. Thirty-second spots raked in a record $2.1 billion in the 2006 mid-term election season.
Evan Tracey, chief operating officer of political advertising research firm TNS Media Intelligence/Campaign Media Analysis Group, projected presidential candidates will at the least match the estimated $40 million spent in 2004 on primary campaigns, and could, depending on how much money is raised and how many contestants remain deep into the primary season, ultimately double or triple that amount.
With no single candidate yet to emerge as a party favorite and funding dispersed broadly across multiple campaigns, the 2008 presidential race represents a dream scenario for ad executives.
Location is the key determinant for cable ad organizations that hope to rake in a share of primary spending. So is timing.
Most of the primary money will likely be gone by Feb. 5, the date of the largest ever “Super Tuesday” collective of presidential party primaries, which could involve as many as 29 states. The latest addition to the group of states with Feb. 5 primaries is New York, which adopted legislation in April to move its primaries, joining California, New Jersey, Utah and a host of others.
The Feb. 5 Super Tuesday in turn puts extra weight on states that will sneak their primaries in before the big day. They include New Hampshire, Nevada, South Carolina and possibly Florida — states where cable advertising incumbents Comcast Spotlight, Time Warner Cable Media Sales, Cox Media and Advance/Newhouse Communications could enjoy an early political advertising harvest.
Despite cable’s rising profile within the political spending category, broadcast TV remains the biggest beneficiary of political ad budgets overall. An August 2006 political advertising analysis published by TNS declared that while broadcast remained “the clear leader” in political ad spending, other media including local cable, radio and the Internet were gaining.
Cable is getting more attention from political consulting firms partly because of the medium’s ability to reach highly prized voter segments.
In the months leading up to the 2004 presidential elections, advisors to President Bush’s campaign identified a broadcast television “GRP gap,” according to Tracey, who recounted the Bush media strategy at a 2006 Broadcast Cable Financial Management Association conference. (GRP refers to “gross rating points,” a measure of advertising reach.) Tracey said Bush advisors turned to spot cable and, to a lesser extent, radio advertising, in an attempt to influence voters the strategists believed weren’t tuned in to over-the-air television.
Also appealing to candidates is spot cable’s ability to zero in on exacting geographies that can have a big impact in closely contested races. Nick Grouf, who orchestrated the Internet fund-raising strategy for Massachusetts Sen. John Kerry’s 2004 presidential bid before co-founding the cable ad agency Spot Runner, said Kerry strategists were won over by cable’s unique geo-targeting capabilities.
“What I discovered after a decade on the Internet was that you can target more effectively in local television on a geographic basis than you can target on the Internet to this day,” Grouf said. “That targeting capability is unique to local cable, and it is unique to almost any other mass media platform in this country.”
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