Radio hasn't historically been the first stop for candidates seeking voters. But for the 2016 election cycle, iHeartMedia is looking to get a bigger chunk of political ad dollars by stealing share from TV.
The radio giant, formerly known as Clear Channel, spent last summer building a new political ad sales and strategy division, charged with convincing political buyers that as TV's reach dwindles, radio can be a more cost-effective option for targeting voters.
"Radio has never gotten its fair share of political spend," said Bob Pittman, chairman-CEO, iHeartMedia. "But a lot of that was our fault, because we tried selling what we had instead of what they needed."
In an effort led by Kenny Day, senior VP-political sales and strategy, iHeartMedia has brought in a dedicated political team of 10 people based in Washington, D.C. who are working with another 150 ad sellers across the country. It's the first time the company has a centralized political team acting as liaison to the D.C. establishment crowd.
Radio traditionally only receives a single-digit percentage of political ad dollars in an election year, according to Steven Passwaiter, senior director-business development, Kantar Media's Campaign Media Analysis Group.
But radio's political ad revenue is likely to grow 10% to 20% this year, he predicted. And he expects iHeart to be an important driver of that growth.
"By setting up shop here, and in a meaningful way, they are showing they are taking it seriously," Mr. Passwaiter said. "There is no substitute for actually being here. They have put themselves in a good position to get a piece of all the money that's going around."
Campaigns should allocate 15% to 20% of broadcast budgets to radio or risk "leaving some voters on the table," according to Mr. Pittman. "It's not just that radio's cost per voter impression is much lower, enabling greater frequency; radio's flexibility also makes it easier to turn on a dime and pivot on key messaging whenever campaigns need it."
TV remains the leader in political advertising, and it's not clear that it will give up share easily. Kantar Media estimates that political TV ad spending will also grow, topping $4.4 billion this year, up from $3.8 billion in 2012.
"TV will be extremely important for the foreseeable future," said Peter Pasi, VP-political sales, Collective, an advertising firm. "It's the best way to tell a story -- sight, sound, motion. "There's no better way to reach a broad audience."
But many times candidates are actually trying to reach a very specific, niche audience, "and that's challenging to do on TV," Mr. Pasi said.
Indeed, campaigns and their allies are starting to place a greater emphasis on radio, as the growth of digital platforms like iHeartMedia's own iHeartRadio, allow for deeper audience targeting. But most of the growth is happening in digital radio, not terrestrial, according to Vincent Harris, CEO of Harris Media and chief digital strategist for Senator Rand Paul.
The opportunity to geo-target voters is making campaign managers and candidates look more closely at digital radio, Mr. Harris said, especially since, for the the most part, TV does not offer the same levels of audience targeting.
"As digital radio gets more sophisticated, campaign managers and candidates realize it's one of the best ways to stretch their dollar," he said. "Radio is still very effective and very cheap, and now there's the means to reach a very targeted audience."
iHeartMedia will lean on its vast trove of data from iHeartRadio to target listeners beyond obvious formats like talk radio.
"iHeartMedia can tell campaigns where moms are, where millennials are, where African-Americans are, across all formats and locales because the company now offers the data and tools to do just that," Mr. Day said.
Advanced audience targeting and data-matching is available on iHeart's digital platform, Mr. Day said. But the company is also using data gleaned from digital to inform traditional terrestrial radio buys.
"Essentially, we deliver data-informed voter targeting across our entire platform," he said.
The majority of political advertising on radio historically went to talk news, but the ability to use data to find audiences wherever they are listening opens the door to other formats, Mr. Passwaiter said.
"There's opportunity to spread money to music formats, for example, where in years past it was a bit of a struggle," he said.
It also helps radio's cause that TV has been facing its own issues. The sheer amount of content available across TV and digital services has fragmented audiences, while the ability to skip ads and watch content on non-ad supported platforms has become increasingly common.
Mr. Pittman bolsters his pitch with Nielsen data showing that broadcast radio reached 93% of the U.S. population, while TV reached 85% in the third quarter. And when it comes to reaching millennials, radio reached 92%, ranking first. TV comes in third, reaching 73%.
"TV no longer has the reach it did; radio is a lot cheaper than TV and in many cases digital," Mr. Pittman said.
A 60-second spot on radio is also about 30% to 40% cheaper than even a 30-second TV commercial, depending on the type of radio, according to Will Feltus, senior VP at National Media, which focuses on Republican media research specializing in voter targeting.
There are 89 legislative bodies being re-elected on Nov. 8; iHeartMedia classifies 23 of them as highly competitive. "And there are thousands and thousands of down-ballot races in which TV is inefficient and cost-prohibitive for candidates," Mr. Day said. "So we see a huge opportunity."
iHeartMedia predicts this election cycle will be the biggest yet for the company. The radio giant saw political ad spending increase 30% in 2015 from 2011 leading into the 2012 presidential election, indicating strong pre-cycle spending, Mr. Day said.
Mr. Day joined iHeartMedia last summer Yahoo-owned BrightRoll, an ad tech firm. During his time at BrightRoll, Mr. Day introduced the brand to the D.C. market, building new offerings and establishing new partnerships, as well as serving as a liaison to political parties and candidates, issues and advocacy groups and coalitions. He previously served as digital campaign advisor for online advertising company Conversant, where he established their D.C. office.
iHeartMedia was searching for someone with the right combination of political connections and ad sales experience.
The company plans to use the momentum from the election to propel its ad sales beyond the presidential race.
"While this particular election will end in November 2016, we are taking a much broader and longer term view: there are elections taking place all the time across the country -- judgeships, gubernatorial, House and Senate, local statehouse elections, local and national ballot initiatives and more," Mr. Day said.