Media ad spending from January to August across all media slipped 1.3%. Without the political spending, that falls further to 1.6% -- a difference of $331 million. Without campaign spending or the summer Olympics (another booster of even-year ad spending), overall ad spending from January through August would have declined a full 2.4% to $89.4 billion, according to Ad Age estimates. And once political-spending data are available for September and October, when 70% to 80% of campaign outlays occur, that gap will yawn into a chasm.
That's despite the fact that total political spending on all media is expected to top $2.5 billion, with the presidential campaign alone exceeding $750 million, according to estimates from the Campaign Media Analysis Group at TNS Media Intelligence.
Nowhere is the effect of the election greater than in local broadcast TV. Campaign spending is such a staple that TV-station operators view their business in two-year cycles, with odd-numbered years expected to be lean and even-numbered years like this one expected to be fat.
Even with political spending and the Olympics, this year will probably see a decline for broadcast TV worse than 1970's 1.5% drop, according to the Television Bureau of Advertising.
"I've been somewhat disappointed in it because we haven't seen the growth rates that we traditionally see," said Jack Poor, the industry association's VP-marketing. "You know: exponential growth from week to week. It's been steady growth, obviously, but it's been disappointing."
Campaign revenue is good for TV stations operating in battleground markets, but even there, conditions aren't as tight as they could be, according to John Hendricks, exec VP-sales for Tribune broadcasting and interactive. One sign: Inventory isn't tight enough to force nonpolitical spots off the air in favor of political commercials. That was a big problem in 2006, but not now.
"The automotive industry, telecom and retail are three very big categories that have been softer than anticipated in 2008, really because of the downturn in the economy," Mr. Hendricks said. "In a typical year, when the underlying business is strong, you end up pre-empting some of your regular customers. This year, because the traditional business is not as strong, you're seeing less pre-emptions."
Hearst-Argyle Television said last week that third-quarter revenue had matched the third quarter of last year. But without political advertising, the quarter would have shown an 11.5% decline in ad sales, which it attributed to the impact of a weak economy on its largest advertising categories.
Gannett's recent third-quarter results showed a 3.9% increase for the broadcasting division over the third quarter of 2007. But without its $26 million in political advertising, the third quarter of 2008 would have come in 9.8% short of third-quarter 2007.
Political advertising is coming in about as expected, said Doug Lowe, exec VP of the Meredith Broadcasting Group. Without it, the third quarter would have seen declines of a percentage in the mid-teens, he said.
As for the other part of broadcasters' business, for "anybody who's in the business," Mr. Lowe said, "this is the worst they've ever seen."
The presidential race has been a big boon to radio, particularly in recent weeks. During the week of Oct. 13, the Obama campaign was the sixth-biggest-spending advertiser, airing 17,813 spots in one week, according to Media Monitors. (The McCain campaign, by comparison, didn't even crack the top 100.)
Bob McCurdy, president of Clear Channel Radio sales, said the Obama campaign has outspent the McCain campaign on radio by a ratio of 4.5-to-1, particularly in battleground states such as Ohio, Florida, North Carolina, Colorado, Wisconsin and Pennsylvania. Political ad spending across Clear Channel Radio's stations was up between 50% and 60% from the 2004 elections.
But the outlook after Nov. 4 is cloudy at best. "I don't know initially if anything is going to replace the political dollars," Mr. McCurdy said. "The radio industry is really focusing on becoming a lot more creative in our solutions for addressing marketing needs. We're aggressively pursuing categories that hadn't used the medium before and going in with ideas that we believe will work to resolve those marketing issues."
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Contributing: Andrew Hampp