US Insights

Getting to $4.4 billion

Elizabeth Wilner

US Editor

Politics 07.20.2015 / 17:15

melting tv

That's what we're projecting in 2016 political TV ad spending. Here's how we get there

Projecting total political ad spending on television is where Main Street politicking meets Wall Street finance. As noted in this space before, after retransmission fees, broadcast groups count on political advertising as their second biggest source of incremental new revenue. Cable companies eye political as a similarly crucial source of cash. This is why Wall Street  analysts have begun tabulating their own projections for 2016 TV ad spending-and asking us for ours.

The following two assertions are squarely at odds. First, CMAG's over-under on total TV ad spending on 2016 races is $4.4 billion. Second, trying to project total 2016 TV ad spend before the end of the Republican presidential primary may just be a fool's errand.

Timing of GOP primary verdict key

Let's start with the latter point. The conventional wisdom is that a "more, more, more" Republican presidential primary-more candidates with more money to spend, more candidate-specific outside groups paying premiums to advertise, and more states potentially seeing at least some advertising before the nomination is settled-is better for those who sell the ads.

Not necessarily. Michael O'Brien, Scripps vice president and as astute an observer of political ad sales trends as they come, points out that the longer the Republican primary lasts, the longer candidates and their supporting groups are advertising in just one or a few states at a time as opposed to 10 or more states every day. A presidential bout that engages in the spring is key "because we need the three months of inventory in the general election swing states to drive the number" for the second quarter. "If Republican candidates run out the primary until June, we have lost the opportunity to max out revenue" for the quarter, he says.

O'Brien also points out that during the second quarter, Americans are still watching TV. Once June and July set in, people tune out. Higher viewership means higher rates; fewer viewers, lower rates. Then comes the summer Olympics when the best-funded political advertisers typically divert some of their ad dollars to network TV.

The absence of Q2 presidential general election advertising could impact the overall total by as much as $100 million (O'Brien's estimate) or even more (our hunch).

Getting to $4.4 billion

Now here we are with our caveated $4.4 billion. We arrived at this figure using a spend-estimating methodology developed for CMAG by the University of San Francisco's Ken Goldstein. The methodology accounts for a range of factors including the number and location of likely competitive congressional races; the number and location of presidential battleground states; the total amount of money likely to be raised and spent in all races, including for governor; the proportion of total spending likely to go to TV; and how that TV ad spending is likely to be split between local and national, broadcast and cable.

To read the full column in The Cook Political Report, click here

Source: Kantar Media

Editor's Notes

CMAG's Madeline Meininger and Mitchell West contributed to the column, which was published on The Cook Political Report website on July 20, 2015. For inquiries, contact us. Follow @Kantar and sign up for our insight alerts.

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