There are two differences between political advertising from candidates and political action committees. Candidates have limits on fund-raising, and they are guaranteed lowest unit rates. The result for PACs, with tons of cash and no price protection, can be summed up in two words: rate hikes.
According to a Bloomberg report, some of the committees are flush with cash and are like kids in a candy store with money burning a hole in their pockets. Their concern isn’t so much what rate they’ll pay, but rather that there will be enough available commercial inventory at stations for them to be able to spend it.
The result is described as “super-gouge” rates. According to the report, it will not be out of the question for PACs to pay as much as four times the rates that LUR-protected candidates pay.
Ohio is a case in point. The perennial presidential battleground state also has a high-profile Senate race this year. A GM from a CBS affiliate in Ohio said that rates are not a big concern for the PACs, and noted that his station is already having to turn down some requests for air time due to lack of inventory.
The political category, spread over a two-year period, is said to be the source of about 7% of television advertising revenue. That number is expected to grow to 9% after the smoke from the 2012 elections clears.
