27 Apr, 2022
E.W. Scripps leads connected TV consortium to boost political ad reach
➤ Political ad spending on connected TVs could reach over $1.5 billion in 2022.
➤ The consortium has written business with political agencies representing candidates' campaigns and super Political Action Committees.
➤ Scripps believes Arizona and Nevada will be the strongest states for its local TV business during the mid-term cycle.
During the 2020 election cycle, The E.W. Scripps Co. registered $265 million in political ad revenue, an amount that was curtailed by limits on its linear ad load. Now, the company is leading a broadcast consortium with an eye toward attracting more political advertisers within the burgeoning connected TV ecosystem. The Scripps Political CTV Consortium — including Cox Media Group Inc., Capitol Broadcasting Co. and Graham Media Group, among other broadcast groups — is pooling 1 billion connected TV impressions per month. That is enabling the members to extend their reach beyond their linear footprints.
In a recent interview, Michael O'Brien, vice president of distribution for E.W. Scripps, discussed the strategy behind launching the consortium to capitalize on the mid-term election, where political ad outlays are expected to rival those from the 2020 presidential cycle. An edited transcript of that conversation follows.
S&P Global Market Intelligence: Local TV is the top player in the political advertising arena. By grouping all this inventory together, it doesn't seem so local.
 Michael O'Brien, vice president of distribution for E.W. Scripps Source: E.W. Scripps |
Michael O'Brien:
If you go back to 2016, we only had a couple of really competitive races. Fast forward to the 2018 and 2020 cycles, we ran out of inventory. After the 2020 cycle, we saw how big the political marketplace was, and it was running in parallel with the rapid growth of over-the-top viewing and streaming.
So the strategy going into 2022 was: How do we break down the geographic barriers and participate in other states, especially in an OTT world? There were forecasts showing that political ad spending in 2022 would rival that of 2020 and there were two digital buckets. One for funding raising — that's the social media piece. The other is the influence piece through video advertising from connected TVs and OTT. When the forecasts indicated it could be over a $1.5 billion market, we needed to be there for the states and markets we're not in.
So, business has already been written?
The phones were already ringing before the announcement went out April 5.
From the Democratic and Republican parties? Candidates' campaigns?
It's been a combination. The majority has come from political agencies that are representing the campaigns and the super PACs.
They're buying blocks of inventory and then working it for the different candidates in the different markets?
They are buying impressions, not necessarily a specific kind of inventory. With our partners, the consortium has nearly 1 billion available monthly impressions. We're looking to match that with their targeting data and how many impressions there are in a given state or market. That's how it's transacted.
News is the place to be?
Local news remains the top priority. Right after that, it's live and local, whether the NFL, or down to the high schools, Friday night lights. After that, you get into the competition shows like "Dancing with the Stars" or "The Masked Singer," then the dramas and court shows.
There are tiers to it, but in some of these states, so much money is being raised, they are going to buy everything.
What does the overall mid-term landscape look like?
Right now, there are between 70 and 75 competitive House races. There are states that picked up seats. There are states that have lost districts and are now putting incumbents against one other. There are also a lot of retirements in the House. New York and California are trying to carve out a lot of Republican seats, because they know the odds are against them, based on history.
There are nine highly competitive Senate races and nine gubernatorial races.
Another thing for this cycle is the down-ballot. In 2018, there was some $800 million spent. This year, national issues — like education, voting rights, education and abortion — are all getting pushed down to the local levels. The forecast is for down-ballot races to generate close to $2.5 billion.
Every platform is getting aggressive in the space. Roku Inc. has built a team, etc. But we have the experience and knowledge, and with the impressions behind us, we can be a force in the states where we don't have linear.
Is 2022 going to rival the $9 billion that was spent on political advertising in 2020?
Filtering out the Senate runoffs in Georgia that added another $500 million, I think it's going to rival 2020, give or take a couple of points. I’m still waiting on a couple of first-quarter fundraising reports, but the postings I have seen show that candidates are still breaking records in individual states.
What are going to be the strongest states for E.W. Scripps' traditional local TV business?
In our linear footprint, Arizona and Nevada will be the biggest markets. Right behind them are Wisconsin, Michigan and Florida. And I wouldn't have said this six months ago, but Ohio is getting a lot more activity than we ever thought.
So linear and now the connected TV consortium will carry the political revenue day in 2022 for E.W. Scripps?
That's the plan. Local still carries through in politics. The old Tip O'Neill line: All politics is local.
Being able to have all these local impressions in one spot to rival these other OTT platforms that have thousands of apps, but you don't necessarily know where the spot is going to air in, is a selling point. Our knowledge base, our service base, our performance is the story. That's why we built it.
Are you planning to extend the connected TV consortium to other genres, like sports or entertainment?
We're sales people. We're not the ones who say no. We'll keep our ears open to other business development opportunities. We didn't build this to be one and done in 2022.