As we move forward into the 2012 election cycle, current estimates from Kantar Media’s Campaign Media Analysis Group place a record $3.2 billion in television advertising from political candidates and related political organizations. This is an anticipated 52% increase in TV spending from the last presidential election in 2008, which saw $2.1 billion in television expenditures. The tremendous increase can be attributed to the landmark “Citizens United” ruling by the US Supreme Court in 2010 that protected corporate and union funding of political advertising under the First Amendment. This decision has given rise to SuperPACs (Political Action Committees) that are afforded greater freedom in raising unlimited funds from unions, corporations and individuals to broadcast ads intended to influence elections, without having to officially coordinate with a specific candidate’s campaign. The impact of the ruling was immediate, as the 2010 election cycle had a record $2.4 billion in television advertising from political advertisers during a non-presidential season.
POLITICAL IMPACT ON SPOT TV
Timing
There are two key dates within the 2012 election cycle that all advertisers must be aware of when planning spot TV media schedules. These dates are the primaries (which vary; see addendum for current 2012 primary schedule) and the general election (November 6, 2012). Prior to the election dates there are specific political windows that will have an impact on rate levels within active markets. The political window for a primary is 45 days prior to the election date, and for the general election it is 60 days (September 5 – November 6). Within a political window all legally declared federal political candidates have the right to reasonable access and to receive the lowest unit rate/cost (LUR/ LUC). This means that stations cannot refuse candidate ads and may not charge political candidates any more than the lowest rates that are charged a commercial advertiser for the same class of time run at the same time as the candidate’s spot. Such conditions for establishing LUR often lead to rate increases within the political window prior to candidates buying spots and the near-abolishment of no charge spots unrelated to underdelivery weight.
Political issue advertisers are not held to any political window conditions and may advertise at any point in time throughout the election cycle – some have already begun in Q4 2011.
The greatest impact in the primary season will be from the Republican presidential campaigns. The longer it takes to secure the Republican nomination, the greater the spending will be seen later in the season. In 2012, the incumbent President will run essentially unopposed and therefore there will be little spending during Democratic primaries by the Obama campaign. However, Obama (who is expected to raise an unprecedented $1 billion for his re-election campaign) is still able to spend in markets under political window conditions, and the Democratic primaries are relevant where there is an active competition for the Democratic nominee for Senate, House or state-level races.
There are many states holding Democratic and Republican primaries on separate dates and therefore extend their relevance to two separate political windows during the primaries in the first half of the year. Planners must also be aware of markets that have relevance to multiples states which have primaries on different dates. As an example, the Greenville-Spartanburg DMA will be influenced during the primaries from both South Carolina (January 21) and North Carolina (May 8).
Spot Volume
In 2008 and 2010, political advertising was behind only the automotive (factory/dealer) and telecommunications (phone/wireless/internet/TV) categories in terms of total spot TV expenditures for the entire years. During the final week before the general election in each year, advertising with a political message (candidates, issue advertisers, union supporters) accounted for 35% of all spots on the air. The next closest category in that same week is automotive with approximately 10% of all spots. Due to the higher rates paid by issue advertisers (essentially any non-candidate spots that are political in nature), political advertising accounts for over 50% of all spot TV expenditures in the final weeks of the election cycle. The volume of spending, especially in the last 2-3 weeks before the general election can significantly impact general advertising for two reasons:
?Stations will give priority to protecting the schedules for candidates (required by law) and issue advertisers (due to premium non-pre-emptible rates), both of whom must pay for schedules in advance of being on the air
?Viewers will be fatigued by the repetition and seemingly endless deluge of political messaging, potentially creating a huge recall barrier for traditional advertisers that could undermine campaign effectiveness
Dayparts
Due to the fact that political advertisers need to reach a broad base of potential voters, no daypart goes untouched by political spending. Each candidate and issue advertiser must speak to nearly every demographic segment within the pool of eligible voters (Adults 18+). Even during Daytime political spending has impact, with political ads representing 22% of all spots run within the daypart.
However, there are some dayparts that are more adversely impacted when political spending consumes a heavy portion of available inventory. The three news dayparts – Early Morning, Early News and Late News – experience the greatest concentration of political expenditures in spot TV. Each of those dayparts has political advertising that accounts for more than 40% of the total on-air spots in the final week before the general election. Two other dayparts – Early Fringe and Prime Access – also see heavy strains on inventory (45%+ of all spots are political).
Rates
As a result of these demands on inventory and the higher-than-normal rates for issue advertisers, there will be rate increases for spot TV in the 45-60 day window before an election (primary or general).
During the primary season, political advertising’s impact on rates will be highly dependent on the strength of the party nomination race at the time the market is in the active political window. The earlier Republican primaries will be impacted due to presidential nomination influence, but states with open races in U.S. Senate, House or gubernatorial elections can be impacted later in the primary season. Rate increases during the primary election season can average between 7-15% depending on the market’s relevance to a contested primary.
Within the general election window (September 7 – November 6, 2012) rates are estimated to rise on average by 10% above normal due to political advertising. The Early Morning and Early Fringe dayparts will have the strongest impact on rates with a projected 16% increase. The Early News, Prime Access and Late News dayparts are estimated to have rates rise 9%.
Markets
While nearly every market will be influenced by political advertising from federal, state and/or local campaigns, there are a few TV markets that will receive more attention due to their position within states crucial to securing overall presidential victory. These states – identified as “battleground states” –could swing from one party or the other, making them hotbeds for spending to influence the final outcomes.
The following are the states that are currently identified by political analysts as being most important to the 2012 presidential races and will experience the heaviest levels of political advertising:
?Colorado
?Florida: Gained two congressional seats from the 2010 Census, leading to two additional electoral votes – further enhancing the state’s value to securing the presidency in 2012
?Indiana
?Michigan
?Missouri
?Nevada
?North Carolina
?Ohio
?Pennsylvania: May have diminished relevance if current legislation passes that adjusts electoral vote allocation from current “winner-take-all” conditions to proportional distribution based on results in each Congressional district
?Texas: While not likely to change from Republican at the presidential level, this state gained four additional congressional seats due to population changes derived from the 2010 US Census. The affected Texas markets are Austin, Dallas, San Antonio, Beaumont-Port Arthur, Harlingen-Weslaco-Brownsville.
?Virginia
?Wisconsin
MITIGATION OF THE POLITICAL PROBLEM
The following are recommended methods for mitigating the impact of political ad spending within the spot TV medium on spot TV schedules.
Managing Spot TV in the Political Landscape
If an advertiser must continue to use TV as their primary choice of medium these are the situations that must be considered to offset rate increases and spot pre-emptions.
?UNDERSTAND THE MARKETS: Media planners must be hyperaware of the political conditions in all active/planned TV markets for their clients. Races for federal (U.S. Senate & House), state (governor, legislature, judicial) and local (mayor, city council) elections as well as state/local ballot initiatives can influence political spending beyond a market’s importance to the presidential election. For an advertiser, there may be some markets that are simply unsupportable due to the heavy political spending either through the lack of available TRPs or exorbitant rates. Take thoughtful analysis of each market within the advertiser’s consideration set and weigh the risks with the benefits of eliminating some markets from activity during political windows.
?AVOID POLITICAL WINDOWS: Whenever possible, clients should avoid running spot TV within the later parts of each political window. Whether it’s taking a hiatus or moving to a position before/after the political windows, spot TV schedules should only be run in the final two weeks of an election if messaging/promotion is absolutely time-sensitive. Be aware, though, that this will be the choice for nearly everyone else and the inventory/rate pressures post-election can be just as substantial for all those advertisers who avoided spending or were pre-empted during the political window.
?AVOID NEWS: The three news dayparts (EM/EN/LN) will be most heavily and regularly impacted by political spending. Daypart mixes should be adjusted – especially in the final 3-4 weeks prior to an election – with either a reduced or eliminated allocation of spending/TRPs in the news dayparts. This is due not only to the rate issues, but the fact that nearly one in two spots on air during these dayparts will be a political ad, creating a level of clutter and annoyance among viewers that can negatively impact non-political advertisers’ ad effectiveness.
?BUY EARLY: Whenever possible, purchase TV as early as possible to manage rate increases and maintain planned schedules. Long-term planning and buying can help to get in front of the start of political spending, which can help to suppress rate increases that will be accelerating as the political window.
?PLAN FOR PRE-EMPTS: Due to the nature of political advertising, within the political window candidates and issue advertisers will be given extreme preference to all other advertisers in maintaining on-air status. This means pre-emptions are nearly a guarantee in the later stages of the political window, regardless of how far in front a schedule was booked with the station. Advertisers and their agencies must be prepared to manage a spike in pre-empt notices and have a plan in place for identifying acceptable makegoods and allowing for spot movement outside of the originally intended on-air weeks.
?BE CAUTIOUS OF MAJOR EVENTS: Since the NFL and college football season and the MLB post-season (especially the World Series) are within the general election political window, they are often a prized target for candidates and issue advertisers looking to reach a broad male audience. This is even more likely when the teams involved are relevant to a key battleground state. Also, the 2012 Olympics (July 27 – August 12) will be targeted by the candidates and issue advertisers due to the Games’ proximity to the national conventions and the broad audience that Olympic broadcasts typically receive.
Spot TV Alternatives
With the substantial impact that political advertising will make on the 2012 spot TV landscape, this can become an opportunity to consider diverting spending from traditional TV campaigns and into alternative media channels.
?DIGITAL: While political advertisers are using online resources at greater levels than ever before (expected to be about 15% of the total political ad expenditures in 2012), they activate digital more to raise funds, speak to the base and maintain grassroots efforts. There is far less strain on the large inventory availability in the digital landscape from these targeted political efforts, leading to minimal cost implications for the general advertiser. Furthermore, the greater proliferation and consumption of online video options allows for the easiest translation from spot TV in terms of creative management. Advertisers can repurpose spots intended for broadcast to targeted online video opportunities. However, be aware of additional costs beyond media (serving, creative development, management fees, talent usage rights, etc.) when considering the movement of spending from TV to online. The size of the markets must also be considered to ensure that any minimum spend/impression levels necessary to support an online campaign are met.
?LOCAL CABLE TV: While spending has steadily increased by political advertisers in local cable TV, there is still the opportunity to avoid the constant drum of political spots away from broadcast TV stations. Advertisers should consider which cable networks offer the best alternative to their typical target demo and daypart mix. Due to the greater inventory availability, rates are less likely to be impacted on local cable. However, the cable news networks (Fox News, CNN and MSNBC) will have more political pressure than broader networks. There is also the growing usage by political advertisers for demographically niched networks (BET, Lifetime, ESPN, MTV and Comedy Central) if those particular voter segments are vital to a candidate’s success, so be cautious when choosing to move spending to these types of networks.
?RADIO: Though radio does account for 14% of all political ad spending, there is less stress on inventory in radio than in television. The political windows remain the same and candidates and issue advertisers are subject to the same rate conditions as are applied to television. However, these two groups use radio in a more targeted approach (as opposed to the catch-all approach seen in TV), with more focus on news/talk stations and less on music stations. Advertisers will be able to activate radio to reach their targeted consumer audience with less impact on expected costs and negligible schedule disruptions. The primary drawback with converting from TV to radio is the significant change in creative messaging, as advertisers must be prepared to lose the visual impact of their TV spot and create spots in a format with which they may not be familiar.
?PRINT: Only 5% of political ad spending is attributable to print media, with local newspapers being the primary recipient of political print expenditures. Among some consumer segments, newspaper readership may be more attentive during the election cycle as voters turn to strong editorial voices to guide them through their political options. With print, advertisers will have a more narrow reach than their traditional spot TV campaign, but it can be a vital stopgap in some categories to communicate timely promotional information that will be difficult to achieve in the final weeks before an election via broadcast media.
?LIFESTYLE/CREATIVE MESSAGING: Consumers are going to become worn down by the incessant drone of candidate and issue advertising, so that offering an alternative experience will be seen as a welcome respite from the political storm. Creating events or viral marketing campaigns that disassociates a brand from the political discourse can become an opportunity to reach these weary consumers. One important note: you may NOT offer any good/service to anyone who votes (it is illegal), so avoid creating promotions that give out free samples/discounts to voters as they leave a polling place or show off their “I VOTED” sticker.
2012 PRIMARY SCHEDULE
?January 3: Iowa (Republican)
?January 14: Nevada
?January 21: South Carolina (Republican)
?January 31: Florida (Republican)
?February 4-11: Maine Caucuses (Republican)
?February 7: Colorado (Republican), Minnesota (Republican), Missouri (Republican)
?February 14: New Hampshire*- actual date TBD, but either early January 2012 or December 2011
?February 18: Nevada (Democratic)
?February 21: Wisconsin
?February 28: Arizona, Michigan, South Carolina (Democratic)
?March 3: Washington (Republican)
?March 6 (SUPER TUESDAY): Alaska (Republican), Colorado (Democratic), Georgia, Idaho (Republican), Massachusetts, Minnesota (Democratic), North Dakota (Republican), Oklahoma, Ohio, Tennessee, Texas, Vermont, Virginia, Wyoming (Republican)
?March 7: Hawaii
?March 10: Kansas (Republican)
?March 11: Maine (Democratic)
?March 13: Alabama, Hawaii (Republican), Mississippi, Utah (Democratic)
?March 17: Missouri (Democratic)
?March 20: Illinois
?March 24: Louisiana
?April 3: Maryland, Washington DC
?April 14: Idaho (Democratic), Kansas (Democratic), Nebraska (Democratic), Wyoming (Democratic)
?April 15: Alaska (Democratic), Florida (Democratic), Washington (Democratic)
?April 24: Connecticut, Delaware, New York, Pennsylvania, Rhode Island
?May 5: Michigan (Democratic)
?May 8: Indiana, North Carolina, West Virginia
?May 15: Nebraska, Oregon
?May 22: Arkansas, Kentucky
?June 5: California, Montana, New Jersey, New Mexico, North Dakota (Democratic), South Dakota
?June 26: Utah (Republican)
2012 GENERAL ELECTION: November 6, 2012
US SENATE
There will be U.S. Senate races that will impact 33 states. If it is an open race, then both parties will be selecting a candidate in the primary season – meaning more pressure from political spending. The party of the incumbent is listed if they are planning to run again:
?Arizona – OPEN RACE
?California – (D)
?Connecticut – OPEN RACE
?Delaware – (D)
?Florida – (D)
?Hawaii – OPEN RACE
?Indiana – (R)
?Maine – (R)
?Maryland – (D)
?Massachusetts – (R)
?Michigan – (D)
?Minnesota – (D)
?Mississippi – (R)
?Missouri – (D)
?Montana – (D)
?Nebraska – (D)
?Nevada – (R)
?New Jersey – (D)
?New Mexico – OPEN RACE
?New York – (D)
?North Dakota – OPEN RACE
?Ohio – (R)
?Pennsylvania – (D)
?Rhode Island – (D)
?Tennessee – (R)
?Texas – OPEN RACE
?Utah – (R)
?Vermont – (I)
?Virginia – OPEN RACE
?Washington – (D)
?West Virginia – (D)
?Wisconsin – OPEN RACE
?Wyoming – (R)
US CONGRESS
All 435 Congressional seats will be in play for 2012. NOTE: This will be the first congressional election using districts that have been apportioned based on the 2010 U.S. Census. This means that there may be some districts that have been re-drawn to make a long-term incumbent at risk. In addition, some states have gained/lost districts as a result of updated population data.
GUBERNATORIAL ELECTIONS
There will be 11 states affected by gubernatorial (governor) elections in 2012.
?DELAWARE – (D)
?INDIANA – OPEN RACE
?MISSOURI – (D)
?MONTANA – OPEN RACE
?NEW HAMPSHIRE – (D)
?NORTH CAROLINA – (D)
?NORTH DAKOTA – (R)
?UTAH – (R)
?VERMONT – (D)
?WASHINGTON – OPEN RACE
?WEST VIRGINIA – OPEN RACE
–by Dan Elu, Harmelin Media www.harmelinmedia.com
