Beating Up On Obamacare? Ka-Ching For Stations!

TV Watch

by Wayne Friedman Tuesday, July 16, 2013

It may not be the $3 billion or so that TV stations get in ad revenues from political advertising in major election years, but ad revenues surrounding the Affordable Care Act – which becomes law in 2014 -- may generate some $500 million in the coming months, according to a survey from Kantar Media. Much of the advertising will be against the new law, known as Obamacare to many. Others will be advertising new business opportunities spurred by the law. Here’s one reason for all those ad dollars: A Kaiser Family Foundation poll in April found that 42% of Americans didn't know Obamacare was still going into effect. That represents a lot of advertising opportunity for stations -- for or against Obamacare. Though on a different scale, history seems to be repeating itself. Much criticism -- from politicians and others -- predicted that dire consequences would occur when Social Security was instituted in the 1930s; the same sentiment occurred when Medicare started in the 1960s. Like Obamacare, those programs had some hiccups in getting started. Now? It’s virtually impossible to get people to give up either Social Security or Medicate. Did advertising against Social Security appear on radio? Did anti-Medicate ads run on TV? In an off-year local TV season, with smaller political races and no Olympics, $500 million in fresh ad dollars is good news Efforts in support of the Affordable Care Act are well underway -- the Obama Administration is in the midst of spending some $50 million to tell people about the new law. On the state level, California alone is spending some $90 million to educate its citizens. Overall the local TV market is pacing down 7- 8% versus last year’s big political and Olympic adollars. A segment of the overall picture -- core advertising revenue from continuing year-to-year marketers -- is estimated to be up slightly, 2% or so. Some critics still believe it’s possible -- however slight -- that the Affordable Care Law might be repealed. Big-time political groups will continue to push that agenda.

A majority of stations in large and medium markets forgo local-direct clients who are with stations what could be for years and replace them for short-term political just when the local clients need media coverage the most. Then, when clients go to other media who promise to take better care of them...broadcast management begin to stress when budgets are not met and have to rebuild local-direct clients again....which historically, is a tough sell. Be careful not to sacrifice your local-direct accounts in favor of short-term political dollars just because its political season....you could find your recovery a major task. Philip Jay LeNoble, Ph.D.