Election '08: TV Demand May Create Commercial Jams

Will TV's 2008 political campaign be too much of a good thing for stations?

With an expected record-breaking $3.0 billion in media to be spent in 2008--up from $2.3 billion in 2006 and $1.7 billion in 2004--Evan Tracey, COO of the Campaign Media Analysis Group of TNS Media Intelligence, says inventory may be too tight for some TV stations next year, possibly causing some TV commercial logjams.

"Inventory is going to be a big issue in California, Missouri, Ohio, New Mexico, Iowa, New Hampshire, Indiana, and Kentucky," says Tracey. "Those are going to be hotly competitive states."

For example, in California between the presidential primary on Feb. 5, the state primaries in June and the overall November elections, "it's basically an entire year of campaign advertising," he says.

For TV stations, the good news is coming early--there will be twice as much political advertising money flowing into their hands this fourth quarter--$100 million--as four years ago. "And that number is more of a floor than a ceiling," says Tracey. Overall for 2007, Tracey expects TV stations to pull in $400 million--also double the money spent in 2003.

TNS estimates that 70% to 75% of all campaign dollars will run on either local TV stations or on local cable in 2008. Tracey believes that a growing number of presidential candidates will use some national TV--with much of that going to the cable news and cable financial news channels: Fox News, CNN, CNBC, Fox Business, Headline News.

He notes that with the falling costs of TV production, the entry into using national cable TV time becomes easier for many national candidates. Tracey says it can be cheaper than buying market-by-market.

While political candidates can still request the lowest unit rate from stations, those spots continue to be subject to preemption. But because a number of states will have contests that are close and competitive, political candidates will typically spend more to secure specific TV positions that can't be changed.

As far as the Internet is concerned, many candidates will continue to use their own Web sites--as well as broad-based video providers, such as YouTube. But "most of the political activity on the Internet won't be in the form of paid advertising," he says. Internet ad spending will be focused on fund-raising.

TNS Media Intelligence says the Internet is likely to generate record ad spending from political campaigns, but it will still be a fraction of what is spent on broadcast. "Most candidates are trying to get undecided voters, who usually happen to be older," says Tracey. That means using older traditional platforms, such as TV, radio, and even newspapers--not the Net.

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