A Busy Fall Election Squeezes Out Auto Dealers, Retailers

Marketers Worry There May Not Be Enough Ad Space to Go Around This Back-to-School Season

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Back-to-school 2015 work from Target
Back-to-school 2015 work from Target Credit: Courtesy Target

In an election year where everyone will be tuned in to two eye-catching candidates come fall, some marketers are starting to worry that there won't be enough ad space to go around.

Retailers, which count late summer and fall as the crucial back-to-school shopping season, and car dealers, which are usually the biggest buyers of local TV ad time, need to be paying must pay close attention in order to keep their products in the game. In certain battleground markets, a presidential race can soak up a third or more of local broadcast TV advertising time, according to a Bloomberg analysis. Auto dealers learned that lesson the hard way four years ago.

"We relied heavily on TV during that cycle and Ohio was carpet bombed with political TV ads in the months before the 2012 election," said Bernie Moreno, who runs The Collection Auto Group, a chain of car dealerships in the Cleveland area. "We were not able to get our message out effectively."

Indeed, four years ago, many car ads were bumped off the air in local markets. In October 2012, the number of car ads that ran on local broadcast stations in Cleveland, for example, fell 16% from the month a year earlier, to 4,553. The number of political ads soared to more than 27,000 that month, according to Bloomberg's analysis of data from Kantar Media Intelligence, CMAG and Kelley Blue Book. Such ad losses may have slowed the rise of new auto sales on average by 1% in September 2012 and 1.5% in October 2012.

Already, the race for the White House has pumped more than an estimated $98 million into local broadcast TV advertising, according to data from CMAG, which estimates local stations may get $3.6 billion in political ad spending, a 12.5% uptick over 2012.

Amplifi, the media investment arm of Dentsu Aegis Network, recommends that marketers mind the political calendar when developing plans. Political rates are federally protected, providing the lowest unit rates for campaigns (though not PACs), during certain time periods, so such windows are best avoided. Companies should also get to market early in order to maximize negotiating power.

"Many local stations will be holding back a portion of their inventory with political expectations, so available inventory for standard business will be decreased and rates will quickly increase as business is placed," cautioned Jennifer Hungerbuhler, exec VP-managing director, local video and audio investment at Amplifi, in an email. She noted that advertisers should avoid TV news, or at least decrease spending, during such segments, because political advertisers seek out those periods first. "Also, [it] may be good to keep in mind that weekend newscasts typically see less demand from political advertisers," she added.

Some retailers are taking a wait-and-see approach when it comes to their media buys, while others aren't worried—or stayed mum. Marketers at Old Navy, typically a heavy back-to-school advertiser, don't think the election year will have an impact on its TV buys, according to a spokeswoman. A spokeswoman from Target said the chain knows elections will impact what its guests are thinking about at that time of the year, but it's too early to share back-to-school marketing plans.

Contributions from Bloomberg News

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