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Tight races, early spending boost political ad prospects for local TV, radio

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Tight races, early spending boost political ad prospects for local TV, radio

With competitive contests in Congress and many gubernatorial seats up for grabs, plus solid fund-raising and early schedules in place, local TV stations and national spot radio are expecting good political ad returns from the 2018 midterm election cycle.

There are 75 truly competitive races in the House of Representatives, with Republicans holding 64 of the seats, said Steve Lanzano, president and CEO of the Television Bureau of Advertising, the not-for-profit trade association of America's local broadcast television industry, during a panel at S&P Global Market Intelligence TV & Radio and Finance Summit in New York on June 14. "Democrats see this as a real opportunity to regain control of the chamber," he said.

The Democrats, Lanzano said, will find it harder to make inroads in the Senate, where there are only 15 competitive contests, and the former has more seats to protect.

There are also 36 gubernatorial contests in play, with 25 GOP incumbents. "We’re going to see a bigger push on the state side," he said, especially with 27 of the governors having veto power over congressional redistricting.

Tucker Flood, president of Eastman Radio Sales Inc., a national representation company for radio stations, said that political fund-raising is well above where things stood with the 2014 midterm election cycle. "With political, the money being raised, it will be spent," he said.

Eastman Radio is seeing a lot of money in the top 10 markets, said Flood. Those areas produce higher rates and that is "having a significant impact on our business." The company's political ad sales level are 15% above where it was at this point four years ago, he said.

California is a big state for midterm elections, as is Florida, where the Senate race between incumbent Democrat Bill Nelson and term-limited Governor Rick Scott. That race is expected to "draw big money that has not kicked in yet," according to Flood.

Candidates will need to use radio to reach Latinos in California, Texas and Florida, according to Flood. He said spending targeting Hispanics represents the fastest-growing political segment for the national spot.

Lanzano said that with some early schedules being placed, inventory concerns could be heightened come fall. Along those lines, he said analytics are opening up other programming genres beyond news as means for candidates to effectively reach voters.

"If women are concerned about educational issues, we can reach them through different types of shows," Lanzano said, adding stations are also touting their online/digital assets as outlets.

Although stations are instituting some automated processes to help facilitate buys on local TV, he doesn’t believe they will play a significant role in the 2018 election, but likely in the 2020 cycle.

As to new broadcast standard ATSC 3.0, which will afford stations addressability and enhanced data capabilities around advertising, Lanzano said there might be some application in 2020. But he figures it is much more likely ATSC 3.0 will come into play to some extent with the 2022 midterms.

Meanwhile, the "Trump factor" might not be in effect during the midterm cycle. Unlike Donald Trump, who eschewed political spending to various degrees in favor of using news and his celebrity to get his message across during the 2016 campaign trail, candidates need local TV to build name recognition, Lanzano said. "No one can take the Trump game plan and use it to market themselves," he said. "They will fail miserably."

Flood said the Trump factor is in effect in other ways. The Democrats are not happy that Trump is in the White House, so they are spending money to try and gain control of both congressional chambers, he said. In turn, Republicans don’t want to lose control of Congress in just two years under the current administration.

"Both sides are motivated to spend, so, in that sense, there is a Trump factor," said Flood.