Industries

Winners in a landslide

Political ads create a bonanza for Virginia TV stations

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Print this page by Richard Foster

Four years ago, Virginians may have thought they were being inundated with political messages after more than 7,300 campaign ads hit local airwaves and newspapers. They had no idea what 2012 would have in store.

Voters in the newly minted battleground state of Virginia were bombarded by an estimated 90,000 to 100,000 political ads this campaign season, according to studies by Robert Denton, a Virginia Tech communications professor and political pundit. In the presidential race alone, the two candidates had spent $119 million in Virginia by late October. Another $55 million was spent during the same period in the U.S. Senate race in which one former Virginia governor, Democrat Tim Kaine, defeated another, Republican George Allen.
Those figures likely translated into big windfalls for Virginia television stations. “I think it’s fair to say the roof has been demolished,” says Jeffrey A. Marks, president and general manager of WDBJ 7, the CBS affiliate in Roanoke. “I think everybody’s predictions of what would happen in the Roanoke/Lynchburg market have been blown out.”

In the Richmond market, it was estimated that the local television stations would reap a total of $22 million to $23 million from political advertising this year, an increase of more than $17 million from 2008.

Virginia was second only to Florida in television advertising spending by the Obama and Romney presidential campaigns and their related political action committees and special interest groups, Denton says. “It’s incredible. It’s certainly historic in terms of the commonwealth of Virginia,” he says.

Virginia became the focus of presidential candidates’ attention after it became a swing state in 2008, voting for Democrat Barack Obama. The Old Dominion had been a stalwart in the Republican column in every election from 1968 through 2004.  Both campaigns advertised heavily in an effort to win Virginia’s 13 electoral votes in a tight race eventually won by Obama.

“I have actually run into people I know who are on the boards of media corporations or who are TV station owners, and let’s just put it this way: They’re smiling from ear to ear,” says University of Virginia political analyst Larry Sabato.

Richmond-based Media General Inc., which divested its newspaper interests in 2012, reported an increase of nearly 370 percent in operating income through the first nine months of the year, in part driven by political advertising at its 18 television stations. The company expects political ads to total $57 million to $58 million this year. Media General’s holdings include stations in four battleground states: Florida, North Carolina and Ohio in addition to Virginia.

A projected $6 billion was spent directly on advertising in the presidential and congressional races nationwide, according to CNN, and about 40 percent of that was spent in the eight or nine battleground states.

“We’re not used to swing-state status but states that have had it [longer] have done studies of the economic impact, and it is really worth tens of billions of dollars to a state,” Sabato says. “It’s not just the advertising — it’s hotel expenses and food expenses and travel expenses. You’ve got hundreds and hundreds of staff being deployed for months and even years.”

There’s also spending by the media and the crowds that accompany a candidate’s visit, such as when President Obama drew 15,000 people to a campaign appearance at Richmond’s Byrd Park in late October.

And campaign spending wasn’t limited to television advertising, Sabato notes. The campaigns increased spending across the board on everything from direct-mail, newspaper and radio ads to websites and social media.

The bounty of political ad spending also was somewhat of a boon to Virginia’s advertising and creative agencies, although most are reticent to talk about political work they do. Most ad agencies contacted for this article either declined comment or said they didn’t do any work for campaigns.

That’s to be expected in a close race, Denton says. Agencies don’t want to risk alienating clients if they pick the wrong horse, but in this economy, they’ll take the money. “You don’t walk away from business, but they don’t talk about it,” he says. Despite protestations to the contrary from the ad firms, political watchers say that the national campaigns enlisted Virginia-based creative agencies for tasks such as media buying, ad production and social media strategy.

Richmond-based creative firm Madison+Main did some television production work, online advertising and social media consulting this season for political clients, including a political action committee (PAC), a congressional candidate and one of the national parties, says President Dave Saunders. He declines to specify who employed his firm. “Half of my clients vote one way and half of my clients vote the other way, so we don’t want to appear as if we’re taking sides here,” he says.

One problem for ad agencies and television stations, however, is that, with the politicians buying up much of the available commercial airtime, local retailers and advertising buyers found it increasingly difficult to purchase affordable, desirable commercial slots in September and October.

Like other ad firms, Saunders advised many clients to wait on the sidelines, holding off on any major advertising campaigns until after the election. The market for local television ads was overheated by the political ad purchases in the months leading up to the Nov. 6 election, he says. “The inventory was almost nonexistent and the price [that stations] were demanding for spots was exorbitant.”

Robyn Deyo, president of the Richmond-based advertising firm Barber Martin, says the campaign advertising spending had “a tremendous impact on our clients and what they can spend” on their advertising.

In theory, television stations are required to sell ad slots to political candidates at the lowest available rate. That means, however, that if enough clients pay more to be in the same commercial time slot, then the political ad may get bumped. Political campaigns largely circumvented that problem by voluntarily paying premium rates to ensure that their ads air no matter what, says James Taguchi, national sales manager at WTVR 6, Richmond’s CBS affiliate. “The bottom line is that they just want to spend, and when you’re in a race as close as this presidential race with two candidates as well funded as they are, you’re going to pay whatever it takes,” he says.

That situation led to blocks of back-to-back political ads on television and general oversaturation of the airwaves.

By late October, the political campaigns had “already reached the point of diminishing returns,” Sabato says, but they didn’t stop spending because the opposing parties couldn’t cede the airwaves to their rivals. “It was easier to negotiate an end to the Vietnam War,” says Sabato facetiously, than it would be to get political opponents to agree to de-escalate their ad spending.

As for regular television advertisers, Taguchi says that his station did everything it could to let clients know what was coming, but that doesn’t mean they weren’t frustrated. Some of his best clients were forced to sit out advertising in September and October.

“As a sales manager, I’m loyal to our regular advertisers. They’re here for 52 weeks out of the year, and we do everything we can to juggle the inventory and give them as much exposure as we can,” he says. “But I’m kind of strapped by the FCC regulations giving [the politicians] access. It gets to be quite challenging. We just try to play it as best we can.” 


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