Political Spending for Midterm Elections Could Top $4 Billion

Looser Restrictions Amp Up Fundraising Firepower, Spark Race for Local TV Inventory

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NEW YORK (AdAge.com) -- Another election cycle, another year of bitter partisan bickering, another record-breaking mountain of cash spent on political advertising -- all of which add up to tight inventory for local TV affiliates. According to Kantar Media's Campaign Media Analysis Group, ad spending this season will top $3 billion. Borrell Associates has predicted spending will get as high as $4.2 billion this year.

We've come to expect steadily increasing ad outlays in political election cycles, but this year is different.

Christine O' Donnell
Christine O' Donnell Credit: Manuel Balce Ceneta
"I've been doing this for 20 years and I've never seen anything like this," said Evan Tracey, president of Kantar Media's Campaign Media Analysis Group.

Aside from issues of anti-incumbency fervor and Tea Party madness, "the big difference in this election is the Citizens United impact," he said, but not necessarily because major corporations are funneling more cash into the system. Rather, last spring's Supreme Court ruling that upended many of the former restrictions on political advertising has given political ad groups more time to spend, and increased fundraising firepower.

Gone are the rules barring such advertising 60 days out from an election, meaning two full months of more spending for third-party groups. But more importantly, now that they can be overtly political in their ads -- naming candidates rather than focusing solely on issues -- fundraising is much easier, Mr. Tracey said. Explaining to potential donors that your spot is going to talk about an energy bill and urge voters to call their representative doesn't open the wallet as easily as pitching an ad calling for Senator X's head.

And since "money follows momentum," he added, Citizens United "gives you the ability to constantly restock the fridge."

That's not to say that Citizens United is the sole factor in 2010. Mr. Tracey pointed out that the Massachusetts election that put Republican Scott Brown in a Senate seat held for decades by Ted Kennedy happened before the Citizens United ruling. "There were 14 advertisers in a two-person race," he said.

And that's where furor over health care, stimulus, high unemployment and a limping economy have served as the kindling for anti-incumbency bonfire. The Republicans went through a raucous primary season in which Tea Party upstarts challenged longtime GOP stalwarts, in some cases ousting candidates seen as likely to pick up seats (Christine O' Donnell's win in Delaware was portrayed by Karl Rove as snatching defeat from the jaws of victory). Now, in the general election, incumbents from Barney Frank to Harry Reid are having to spend big to stay competitive.

That's bad news for them, but good news for TV, where the overwhelming bulk of the money is being spent. It's one thing to have the two parties going at each other's throats in the last days leading up to the election, but with dozens of third-party groups duking it out, markets across the country have become so saturated with political ads that inventory has dried up in some places.

Chris Coons
Chris Coons Credit: Rob Carr
"Yes, there's definitely a lot of political advertising, and it does put a lot of pressure on your inventory. It's a bit of a juggling act. You have to manage it," said Vince Giannini, general manager of WPHL in Philadelphia, a MyNetwork affiliate owned by Tribune Co. He cited some "rather big races in our area" as the cause and said political advertising had "affected a lot of dayparts," and news programs in particular. Most stations in the area "looked ahead" and sensed they would have a lot of demand at this time of year, and began to manage advertisers' expectations.

Stations can employ a few time-honored techniques to help manage their inventory when demand for political advertising is intense. According to one TV-industry executive with oversight of local stations, some TV outlets will reduce the number of in-house promotions they run, or could add some commercial time going into their 11 p.m. newscast. This executive said stations will often work with yearlong clients ahead of time to ensure they have the inventory they need.

So what happens after the election? In terms of actual governance, if Republicans sweep to victory, they -- like Obama -- will likely find that change is easier to promise than it is to enact. But in terms of fundraising?

"There'll be a hangover after this election," Mr. Tracey said. "There won't be a lot of cash on hand." Both sides -- and incumbents in particular -- are "basically emptying their bank accounts" on this one.

And 2012 is just around the corner.

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Contributing: Brian Steinberg

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