Surviving the Political Ad Deluge

In Swing States Such as Virginia, TV Stations Are Swamped With Campaign Cash -- But Some Local Advertisers Are Getting Boxed Out

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Brian Ahladas should be cheering. The local ad inventory he supervises at NBC affiliate WWBT in Richmond, Va., is in high demand, thanks to the coming election. He's fielded a heady influx of advertising from political organizations and, in recent weeks, the presidential candidates themselves.

But instead of sleeping easy at night counting his political ad dollars, Mr. Ahladas has to constantly monitor ad rates and juggle schedules, trying to ensure his local advertisers -- at least those unafraid of their spots running in a sea of attack ads -- aren't kept completely off the air.

Virginia is a swing state -- a crucial battleground for both candidates as they try to stitch together a patchwork of electoral votes. For weeks, the two candidates and groups boosting them have poured ad money into the market. What's more, down-ticket campaigns for Congress and local elected positions are interested in the station's air, and so-called super PACs have been knocking on its door since January.

NBC affiliate WWBT's General Sales Manager Brian Ahladas monitors rates and shifts schedules to keep the locals happy.
NBC affiliate WWBT's General Sales Manager Brian Ahladas monitors rates and shifts schedules to keep the locals happy.
But for every dollar Mr. Ahladas accepts, he has less time to sell to the car dealerships, local fast-casual restaurants and financial advertisers that support his station for the rest of the year.

"It definitely creates a set of conditions where our inventory is strained," he said, noting the station has sold political advertising in heavy amounts since the start of the year. "We understand completely the added stress this may put on those local advertisers who still need to advertise their products and services, even during a political environment."

It's the great paradox of being in local media in a swing state. Wall Street loves to hear about the windfall of political-ad dollars that leads up to a presidential election, knowing it buoys the corporate results of TV-station owners. Yet the flipside is that candidates' ad time keeps local businesses off the air.

Legal requirements say that if a candidate requests time, the station is obligated to provide it. That can sometimes require replacing parts of an ad schedule already established by local sponsors.

Preempted again
"The television preempts come through on an almost weekly basis," lamented Denise Goff, an associate at Lewis Media Partners, a Richmond agency, whose clients include the Virginia Lottery and some local health-care organizations. "It's awful," added Linda Davis, an associate media director at Richmond's Barber Martin agency.

While the law also obligates TV stations to provide ad inventory to federal candidates at the lowest market rate, a surge in overall demand for ads can drive that rate up. Even if advertisers book time well in advance, surging rates may prompt them to drop the ad slot.

"The problem [for local advertisers] isn't that rates go up, as much as it is getting pushed off by the politician demanding availability," said Jack Poor, VP-strategic planning at TVB, a trade organization representing TV-station groups and local TV outlets. Even if an advertiser thinks, ""I'm good because I locked in; I'm not preemptable.' ... OK, but I'm sorry to tell you the law says I have to put this guy in, and not you. That's the quandary."

The situation keeps WWBT's Mr. Ahladas on his toes, monitoring the rates sponsors committed to and the rates candidates are getting. Ad inventory available during the station's local newscasts is highly sought after, as are local avails during prime time. "We submit the rates that would be required to clear, depending on when [the advertiser] is going to get on, and it's up to the client at that point to decide to pay those rates or not," he explained.

It hasn't always been this way in Virginia, which didn't emerge as a swing state until 2008 -- and even then wasn't dealing in the kind of dollars it is today. Through September, the Richmond area received nearly 10 times the general-election-related ad dollars it had in the same period four years ago, according to NPR, which cited Kantar Media CMAG figures. As of last week, the Richmond area had aired 36 ,090 political TV spots and raked in $14,515,960 in spending, per Kantar Media CMAG.

"Virginia stations have hit pay dirt in a spectacular way in 2012. The state already has seen almost twice the presidential TV-ad spending that it saw for the entire 2008 general election, and we've still got a few weeks left to go," said Kantar Media CMAG's Elizabeth Wilner.

The numbers are fueled by a close presidential race and heightened spending by super PACs, or political action committees that aren't directly controlled by the candidates and have fewer restrictions on how much money they can solicit and spend. It's a veritable storm of ad dollars—"a perfect storm," according to Mr. Ahladas—but will regular sponsors return after Nov. 6?

Keeping clients happy
Of course, there are techniques stations can use to try to keep regular clients happy until then. TVB's Mr. Poor noted some TV stations will reduce the time they allot to local promos, offer nonpolitical advertisers online video inventory on the station's website or space on digital-cable channels they may run, or buy back ad time from their affiliated networks. None of these offers a permanent solution.

Many advertisers simply choose to take their ads off the air during the most heated time before the election. At Barber Martin, some clients are running ads on radio, local cable and even print, Ms. Davis said. "They're probably not really happy about it overall, but they don't want to spend four times the rate either."

Even those alternative plans can run into headwinds.

At Lewis Media, Ms. Goff reported that she is finding it tough to get her clients onto local radio stations. "There has been a huge amount of politics placed on radio that in my years, I've never, ever seen," she said. "A quick schedule had to be booked two days out, and it had trouble clearing."

Until Election Day, regular local advertisers may simply not find a lot of room on TV. "If you're watching a show, [the ad breaks] are wall-to-wall political at this point," Ms. Goff said.

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