Can TV Survive Without Pricy Political Ads?
ALEX CHADWICK, host:
From NPR News, it's Day to Day. The long political campaigns come to an end. Good news if you're tired of all those ads, but for the TV stations selling the political air time, not so good. Marketplace's Sam Eaton joins us. Sam, hi. Campaign advertising, it's not new. What's different this time around?
SAM EATON: Well, first of all, Alex, the money. When all is said and done, the Obama campaign alone will have spent upwards of $250 million on TV ads in just a five-month period. This passes the annual advertising budgets of major brands like Apple and the Gap. All told, political advertising for all the different campaigns is estimated to be around two and a half billion dollars, and that's a big increase over the last presidential election cycle, when they spent roughly 1.7 billion.
CHADWICK: Well, that spending spree I think we can say ends today. It's over. Now what?
EATON: Well, that's the big question, Alex. That's the other thing that's so different this time around. Usually, there's a slew of auto and finance and retail ads all lined up to take back the airwaves after election day, especially for these local TV stations. And it's no secret that each of those sectors is taking a huge beating into today's economy. I spoke with Evan Tracey, who heads the Campaign Media Analysis Group, and he says, during many of the past campaigns, political ads were often regarded as a nuisance to broadcasters.
Mr. EVAN TRACEY (Chief Operating Officer, Campaign Media Analysis Group): It was very disruptive and, you know, generally came in right before the big Christmas selling season and demanded all the time. This time around, I think, they were probably a little bit more thankful for this political advertising, and I'm sure there's some head scratching as what to expect when it all goes away.
EATON: Now, especially since this has caught so many by surprise, many local TV stations were projecting growth in ad revenues in the 10 to 12 percent range this year, but now, that figure is looking like it'll be around zero if they're lucky or even run into negative territory.
CHADWICK: Boy. And what are the TV stations going to do to try to deal with that?
EATON: Well, it's - you know, Alex, it's more what they should be doing than what they are doing. Most TV stations look ahead to the coming quarter, but a media analyst I talked to says they need to start looking much further into the future and lining up new models for advertising. On the one hand, you have the economic crisis cutting into ad spending, but there's also a crisis in the traditional model for advertising, as more and more people get those digital video recorders that allow them to fast forward through all the ads.
Experts say, the faster stations can figure out how to break into new ad markets like the Internet the better. And in the meantime, it looks like the only savior on the horizon is the next election cycle, and judging from the length of this one, it shouldn't be very long before all those political ads start hitting the airwaves again.
CHADWICK: Oh great, Sam. We're about to gear up for 2012. Thank you, Sam Eaton of public radio's daily business show, Marketplace.