Revisiting the gurus, Part 3

Today we focus exclusively on political advertising, which is a huge factor in this year's broadcast revenue picture. Back in early May when Harris Nesbitt Gerard analyst Lee Westerfield projected that political ad spending this year would top $1.47 billion, he was regarded at quite bullish - - perhaps overreaching a bit. But now everyone else has upped their predictions to that range. In fact, Westerfield now says he expects the final tally to be in the $1.5-1.8 billion range.

"This remains a banner year for political advertising," Westerfield told RBR. "We continue to see not only record spending levels, but levels that would ultimately yield $1.5 to as much as $1.8 billion in political advertising. That, in practice, means there has been a step-up in fund raising, presumably going through the period from September through November."

Westerfield said the outlook for political spending has improved "marginally" since his May forecast. "The key development that occurred, in late May, was when the Federal Election Commission stepped aside from curtailing so-called 527 non-party organizations' fund-raising. When the FEC opted out of curbs on 527s, both Democrats and, more ravenously, Republican-oriented groups began fund-raising in size. The question now becomes - - will the money be spent, and when? The tricky part for sales managers and analysts alike is anticipating, but not knowing when the money will be spent, since political advertising places so close to air time."

So 2004 is right on track to bring record-breaking political revenues for television stations. The analyst says there's also implicit increased spending for radio as a result of TV inventories being squeezed, but he said that can't be quantified, since buyers don't say that they're moving spending to radio because TV is too expensive or unavailable.