Media & Marketing

Stations enjoy election: Political advertising bounty surprises TV, radio executives

November 13, 2006

More than $10 million poured into Indianapolis broadcasters' coffers this year, experts said, as politicians took to the airwaves in hopes of swaying voters.

A fierce battle over control of Congress and a hotly contested Marion County prosecutor's race contributed to the impressive total, which outpaced 2002 election sales by nearly $3 million.

"It was a surprising year," said Don Lundy, general manager of WRTV-TV Channel 6, which sold more than $1.3 million in political ads. Despite attempts to forecast sales, "we missed it."

He wasn't the only one. Nationally, the $2 billion expected to be spent on political ads this year surpasses the $1.7 billion record set during the 2004 presidential race, said Glenn Hansen, director of the Political Communication Center at the University of Oklahoma.

"It went through the roof the last two weeks," Hansen said. "With everything at stake, the money just ramped up threefold."

Local television stations got the bulk of the bonanza, nearing the $8 million mark more than a week before the election, according to IBJ research. All three major network affiliates-WTHR-TV Channel 13, WISH-TV Channel 8 and WRTV-brought in at least $1 million each. Radio stations and cable TV providers also saw increased business.

Broadcast television attracts more political ads because it provides an opportunity to reach mass audiences. And it must be working, Hansen said, if campaigns continue to pour more money into the medium.

Candidates also may be motivated by a perception that they have to advertise if their competitors do, he said. Still, Hansen said he heard a lot of negative comments about the amount of political ads this year.

The vitriol sure seemed to pay off in Indianapolis.

In the week before Nov. 7, political advertising on radio, broadcast television and cable television in the local market already had reached more than $8.3 million, according to broadcasters' public files. Some stations also shared additional data with IBJ to help decipher the stack of advertising contracts and revisions.

Some industry estimates were even higher. The Television Bureau of Advertising said $10.8 million had been spent in the market a week before the election, said Gary Belis, spokesman for the New York-based trade association.

IBJ's data shows Channel 13 was the clear local leader, selling $3.5 million in political advertising-45 percent of the $7.7 million TV stations had collected at that point.

"It keeps a lot of people busy," said Tim Warner, WTHR's sales director. "With the onslaught of dollars that were trying to be placed in the marketplace, we were extremely busy."

During the 2002 election season, he said, political advertising generated $7.1 million in this market.

Campaigns might spend a lot on ads, but stations do not make it or break it on that revenue. Broadcasters said political ads represent a very small portion of their regular sales, but wouldn't give specific numbers.

Revenue estimates from BIA Financial Network Inc. provide some insight, though. This year's election-related ad revenue represents about 6 percent of the $60 million the Virginia-based research firm said WTHR collected in 2005.

The political payday is treated like any other revenue, Warner said. Stations build budgets based on what they expect to earn.

WISH's $2-million-plus in political ad revenue came in about 30-percent higher than expected, said General Manager Jeff White. He credited candidates' last-minute push to get ads out in the final week.

"For a while there, we thought we'd be under that number and it just started to build the last three weeks," White said.

To project how much revenue political ads will bring in, White said, he talks with reporters and does research to get an idea of what races will be contested and what campaigns have money.

In an election that featured mudslinging from both sides of the aisle, it's not surprising that the national Democratic and Republican campaign committees each poured more than $1.5 million into local media outlets. At the time of IBJ's analysis, national ads accounted for 38 percent of all spending.

Many of those ads targeted congressional districts that were not local, thanks to the odd shapes of districts that touch on the fringes of area broadcasters' viewing areas.

Cable television providers didn't capture as much extra revenue as their broadcast counterparts-only about $217,000, according to the IBJ analysis-but spending was up. Comcast reported a 41-percent increase in sales statewide over 2004, and a 29-percent bump in Indianapolis, to $475,000.

Radio also experienced increases. Radio One's four Indianapolis stations collected more than $105,000, up 10 percent from the 2002 midterm election, said Amos Brown, strategic research director.

Competitor Cumulus Indianapolis led the radio market with $192,316 in revenue-including $160,416 from its ratings powerhouse WFMS-FM 95.5.

The smoke's still clearing, but a few broadcasters already are predicting 2007 might be another strong year for political advertising, with the Indianapolis mayor's race headlining the action.

That's politics.
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