The 2012 Election Cycle Is Already Costing You Money

Political Battles Are Driving Up the Cost of 30-Second Spots

By Published on .

If you're like many Americans, you may be completely sick of all those political ads on TV. But you should know that no matter what you do, those ads are already costing you money and airtime.

Here's what I mean. I'm in the advertising software business, so I definitely see the increased volume of advertising dollars. Over $50 billion dollars a year goes through our software systems, and so I can tell you how much President Barack Obama and Mitt Romney are paying for ads on network TV all the way down to market No. 210 (which, by the way, is Glendive, Mont.).

In short, the presidential ad war will likely end up costing both political and non-political advertisers alike. In the first six months of 2012, $1 billion in advertising flowed through STRATA's ePort system, of which 40% was political. So far this year politicians are buying more advertising than any of the large agencies, and half of the top 20 advertisers are political. It's the most expensive election year in history, and here's why it matters to you, even if you dislike politics.

  1. Whether you're a larger or small business, look out. Whether you're the ad director at Ford or Pepsi or the owner of a local diner or insurance firm, it's going to cost businesses more to advertise this year because of Obama and Romney. The demand for TV airtime is strong, and it's driving up the price of a 30 second spot on a local station. Which means for your business, be realistic in your budgeting plans.

  2. Negotiation power is very limited. You may be a great closer and business builder, but TV stations have the power this year. Plus , thanks to the Olympics, airtime is even more limited. Newscasts and regular programming are shortened or even eliminated, and there's not as much airtime available. Many business are willing to open their wallets and compete for the coveted airtime. That being said, there are still quite a few that are pushing advertising to Q4, particularly after the elections and the Olympics are well behind us.

  3. Unless you're in a cave, you will see political ads this year. Political ad spend is outpacing the Olympics and every major consumer brand. Thanks to Internet fundraising and crowdsourcing, both sides are buying more ads, in better time slots, on more stations. And even with your online and print ad purchases, you'll be contending with political spending.

  4. The power of the purse matters even more in swing states. Florida, Ohio, Virginia and others are battlegrounds not just for votes, but for airtime. Despite the talk of dying newspapers and free radio, even traditional print and news and Top 40 radio are seeing a boost. Your decision to be headquartered in Miami or Richmond matters this year.

  5. Don't let social-media spending fool you. Both parties still have more than enough money and people to cover the grassroots Twitter initiative and still drive up broadcast ad rates across the county. Lesson for business: Your competitors can drive a social-media campaign for free, so you still need the competitive edge of traditional advertising as well as earned media.
There's no doubt that since the Supreme Court expanded the right to advertise, a floodgate of money and influence has opened. Whether that 's good for democracy or business is another discussion. The takeaway is the same regardless. Budget, plan and prepare to watch many collective advertising hours spent on the race to the White House.

John Shelton is the president-CEO of Chicago-based STRATA.
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