• by Paul Gough , January 26, 2004

Political advertising could reach a record high this year, as a hotly contested presidential race and the as-yet-undetermined impact of campaign finance reform laws factor into the process.

Campaign Media Analysis Group predicts that overall, political advertising in 2004 could total $1.3 billion. It's certainly a big part of the growth in overall ad spending for the year, which TNS Media Intelligence/CMR predicts will grow 7.8 percent compared to 2003. The growth will be accelerated in the third and fourth quarters--with increases of 8.4 percent and 8.9 percent--mostly because of the heightened pace of campaign spending that will push ad spending into overdrive.

If this is true, political ad spending would make 2004 a bigger year than 2002 (which ended up at about $1.2 billion) and slightly larger than 2000, the last presidential election.

"The potential for a record is clearly there," said Evan Tracey, president of the Campaign Media Analysis Group. He notes that Bush has a huge campaign war chest, which he'll spend in the states that are considered battlegrounds in November.

Broadcast TV station owners are clearly counting on political spending to lift revenues. Kenneth Lowe, chairman and chief executive officer of E.W. Scripps Co., said last week that he believes Scripps' broadcast station groups were in a particularly good position to benefit from heavy campaign spending. Scripps has TV stations in Arizona, Missouri, Ohio, Maryland, Michigan, and Florida--all states in which Democrats and Republicans are expected to be spending heavily on broadcast to ensure that their messages get out to voters. TNS predicts that spot television will see a 10.8 percent increase in 2004, among the largest increases in the categories, which TNS said is primarily due to political advertising.

"The lion's share [of political ad spending] is going to be broadcast TV," said Tracey. It's estimated that more than 75 percent to 80 percent of all campaign ad spending goes to broadcast television, with a small but growing portion going to cable TV and almost nothing going to network TV.

"There's going to be a lot of money flowing into key states," said Joel Rivlin, deputy director of the Wisconsin Advertising Project at the University of Wisconsin-Madison.

Rivlin believes that one place to watch for high political spending is in states with open U.S. Senate and House of Representatives seats, particularly in North Dakota, Florida, Tennessee, and South Dakota. Voters may not see a presidential ad in some areas of those states, but they will have seen ads for Senate and/or House candidates, he said.

There are other factors beyond politics too.

"The wildcard continues to be campaign finance reform," Tracey said. "It could be a couple hundred million into the process if the FEC [Federal Election Commission] interpretation slants on the more liberal side."