Executives at local station and cable organizations are turning the page on this year's historic election cycle and looking ahead to projections for ad spending during the 2018 midterm elections.
With President-elect Donald Trump largely eschewing spending on TV stations until the final few weeks of the campaign and Democratic candidate Hillary Clinton not measuring up to President Barack Obama's allocations in 2012, outlays reached some $2.6 billion, according to estimates from Kantar Media's Campaign Media Analysis Group, off from the record $2.8 billion in 2012.
Steve Lanzano, president and CEO of the Television Bureau of Advertising, said in a recent interview that the 2016 political cycle was "clearly not what we thought a year and half ago." He said that if his organization and other groups had known Trump would become the GOP candidate, revisions would have been made from originally much higher forecasts.
On the local cable side, the 2016 political ad spending tally could total as much as $850 million, according to Tim Kay, director of political strategy at NCC Media. Based on data from NCC, which is owned by Comcast Corp., Cox Communications Inc. and Time Warner Cable Inc. and works with various other operators in handling about 70% of all local cable political advertising in the U.S., Kay said local cable will record more than $800 million in category ad sales in 2016 and perhaps approach the $850 million mark. The industry nabbed some $650 million from the category in 2012.
Overall, Kay called 2016 a good cycle for NCC.
"There were some concerns about maturation of the market for cable, but we saw some shifts in spending in terms of digital and broadcast," he said. "As we look ahead, we always evaluate how we performed and make sure we are helping the candidates. We want to be part of their planning and spending going forward."
Peter Leitzinger, an analyst at SNL Kagan, an offering of S&P Global Market Intelligence, foresees local cable, with its geo-targeting capabilities, becoming more of a force in garnering political ad dollars in the cycles ahead.
"Cable could see a growth in reach and a bigger push against the broadcast stations," he said.
Looking ahead, Kay is sanguine about NCC and local cable's political ad prospects. He noted that while there is an expectation about tax reform and the repeal of the Affordable Care Act, "candidate Trump" did not necessarily lay out a lot of his plans, so "we will see how that plays into the political climate" going forward.
Notably, there are also gubernatorial contests in New Jersey and Virginia in 2017, with the respective incumbents, Republican Chris Christie and Democrat Terry McAuliffe, scheduled to exit in the face of term limits. Kay believes aspiring candidates from both parties will help establish the tone for a heightened cycle in 2018.
According to SNL Kagan estimates, political ad spending in 2018 could hit $2.64 billion, which is 9.0% higher than the $2.42 billion reported in the last midterm election in 2014.
Competition for House of Representatives seats aside, Lanzano points out in 2018 33 U.S. Senate seats will be in play, almost matching the 34 contested in 2016. Lanzano said that in 2018, Democrats will be looking to defend 23 Senate seats. On the gubernatorial front, Lanzano said there will be 36 upcoming contests, trebling the dozen from this year’s cycle.
Lanzano expects that 2018 should be "a good cycle." After the whirlwind of the 2016 presidential race, though, he is guarded about handicapping 2020.
"Who knows what will happen four years from now?" he said.
In assessing the 2016 presidential race, Lanzano believes that Trump, a wealthy man who steeled his brand via his reality TV turn on "Celebrity Apprentice," represents a one-time, ad marketplace dynamic.
"Here’s a person who built his brand on TV," he said, also nothing that "he figured out that every time he tweeted something, no matter how outlandish, the media ate it up and he got free media from it."
Asked if the gambit of deploying social media as a substitute for media spending could become a more prevalent strategy going forward, Lanzano was skeptical.
"I don’t think so, unless ['Celebrity Apprentice' villain] Omarosa or another reality star with a big brand becomes a candidate," he quipped. "My belief is this was a unique situation."
He said that if another Republican would have become the party's presidential candidate, spending would have increased on the stations.
That may be true, but the likely reality is that President Trump will be seeking a second term in 2020.
Kagan's Leitzinger said it is premature to gauge how the political landscape will take shape then and if station groups will pick up more dollars from the presidential race.
"In listening to station executives, they believe this was a one-time event. I'm not so sure about that," he said. "Four years from now is Trump going to change his tactics? That's up for debate."