Media Economy:Behind the Record Political Ad Dollars;

MediaLife Magazine Ohio, Florida and Virginia got the biggest share By Diego Vasquez November 6, 2012 Note: We at LeNoble's Media Sales Insights thought it might be a clever idea to post an essay following the election which told a story to be inveiled post-election...to see it's acccuracy as well as the questions leading up to its conclusion. Philip Jay LeNoble, Ph.D. Enjoy...the following...... On election night all eyes will be on Ohio to see which candidate won the battleground state. Both candidates and their super PACs have heavily targeted the state, along with Florida and Virginia, over the final weeks of the campaign, pouring absurd amounts of money into local television. That’s contributed to an estimated $2.6 billion in political dollars that will be spent on the medium this year, according to a new report from SNL Kagan, up 68 percent over the 2008 presidential election. It’s also up 24 percent over the record tally of $2.09 billion in 2010. While analysts have been forecasting a record year since the Citizens United Supreme Court ruling two years ago, which essentially lifted a ban on political spending by corporations, the sheer volume of advertising has been overwhelming. Voters may be extra fatigued because political ads began earlier than usual. With the big surge in ratings for the Olympics, candidates and super PACs scrambled to get their ads on during the August event, leading into a very tight fourth quarter, where 60 percent of all political money was spent. Peter Leitzinger, analyst at SNL Kagan, talks to Media Life about the impact of Citizens United, how 2012 fared compared to his earlier expectations, and what political ads have done for radio. How does political ad spending this year line up with your early estimates? We knew political was going to be higher than the 2008 election. In our original 10-year projection we estimated this year to be $2.5 billion in local TV revenue, and by 2018 that number would grow to $3 billion. The original $2.5 billion projection represented a 21 percent increase over the $2.09 billion in 2010 and 63 percent over the $1.55 billion in 2008. We had to revise those numbers because of the massive Olympic spend, early caucuses/primaries, and the importance the PACs and super PACs were placing on television. Our new estimate stands at $2.6 billion in political revenue. How much of the gains do you credit to the Citizens United ruling? The Citizens United ruling was a huge part of the increase in political spending, but this year seemed to be the perfect storm for political advertising that started with the Olympics and ramped up all the way through election day. We saw political spending on local TV start earlier than the last few years in part due to the Olympics being a perfect advertising platform for the candidates and the early caucuses and primaries held in January. We also saw a record amount of political contributions for both parties. A larger amount of political ad dollars was spent on the Congressional elections as well, because of the competition between parties to control Congress was at stake. Which swing states have seen the most spending and why? Ohio, Florida and Virginia. They are crucial battleground states with a large amount of electoral votes. They are also very close in the polls, making them advertising magnets for the candidates. Since 1964 no winning president has won the presidency without taking Ohio. Why does so much of the spending come in the final weeks? In each of the last three election years the second half of the year has produced 80 percent of political revenues for local TV and radio, with 60 percent of the total political coming during the fourth quarter. This has to do with political strategy in the modern era. The candidates have better information on which states are swinging in a party's direction. The candidates and their campaigns hold onto contribution reserves so they can effectively target the markets that matter the most before election day. Then we see a flood of political advertising hit those areas. How much of a boost has the election given local television this year? Will the stronger spending last once the election is over? Each party's campaign reserves are unleashed in the two to three weeks before the election. It is the last surge of money in hopes of swaying any voters in one direction and targeting the swing states for the much needed electoral votes. Much of that money doesn't come into TV stations until after the election, which is reported by broadcasters in the fourth quarter. There will be some spending on issue-related political ads, but I haven't been following post-election political in previous years so it is hard for me to comment on post-election (first quarter 2013) political ad dollars. What kind of boost has radio gotten from the election? Radio gets a surge right before the election, as this is the crucial time when voters are really thinking about their votes and are actually in transit to the voting polls. It is the most influential period. Why does television remain such a popular medium for candidates in an increasingly digital age? Television will always be king for the political candidates because it can effectively communicate a message to a market/demographic that no other medium can. Using sound, picture and message candidates can influence voters in a way that radio and internet cannot.