Political pressures push price points

Campaigns for presidential contenders Sens. John McCain, R-Ariz., and Barack Obama, D-Ill., already have pumped hundreds of thousands of dollars into TV spots this year, as have Missouri’s gubernatorial candidates, Attorney General Jay Nixon and U.S. Congressman Kenny Hulshof.

Despite the frenzy of campaign spending in the Springfield market, managers at Springfield stations said revenue from political ads for the current election cycle is pacing behind 2006, when then-state Auditor Claire McCaskill successfully unseated U.S. Sen. Jim Talent after his first term.

KY3 Inc. President and General Manager Mike Scott said the 2006 U.S. Senate race brought in significant out-of-state ad revenue from 527 political organizations and political action committees rallying behind their respective candidates. So far this year, Scott said, those groups haven’t bought TV spots in the Springfield market.

CBS affiliate KOLR10 and Fox affiliate KSFX27 have likewise noticed the absence of advertising by PACs this fall, said local sales manager Bob Chambers, who noted that October – typically the heaviest month for political ads – is always the “X” factor.

As political advertising applies more pressure on the local market, the cost to advertise on major network affiliate stations will undoubtedly rise and available inventory will be at a premium, Chambers said.

“Political (ads) always affect inventory demand, because you have nontraditional money being placed in news products but in other products, also,” he said. “It’s a supply-and-demand issue, just like any other industry.”

Priced out?

How exactly is demand affecting local TV ad rates?

An organizer of a smaller campaign hoping to reach Greene County voters before the Nov. 4 general election said recent rates quoted for 30-second spots were outrageous.

“We don’t have the fundraising ability of Obama and McCain, but that’s who the TV market is going to be saturated with and we know that,” said Morey Mechlin, a member of Greene Countians for Fair and Impartial Judges. “We can’t afford to compete. … TV is the way to reach a lot of people, and we’re not going to have that ability with the pricing the way it is.”

Bill Williams at Wannenmacher Advertising, which worked with Mechlin to research the cost of TV ads for the campaign, said the rates are significantly higher than he’s seen in some time.

“The pressure’s such that the lowest unit cost is out the window,” Williams said. “You’re going to have to buy either guaranteed placement or top tier.”

The fixed rate for a 30-second spot during the 6 p.m. newscast on KOLR10 was quoted for Williams at $3,200 or $1,700 for second-tier, non-preempted placement, Williams said, adding that he’s purchased similar spots for clients at $450 to $600. The cost of a 30-second ad during KY3’s 6 p.m. newscast was listed as $1,700 on an August rate card, up from $1,400 in July, Williams said. The going rate before the political season was about $850 to $1,000, he added.“That’s the pressure when you’re dealing with a limited commodity,” Williams said. “I don’t think they’re adding rates. I think they’re holding the line.”

Officials at both stations said the pricing is, indeed, a byproduct of the political ads being purchased by campaigns targeting Ozarks voters.

Hulshof’s campaign paid roughly $175,000 for more than 750 TV spots to run on KOLR10 and KY3 between Sept. 2 and Election Day, according to contracts on file at the stations. The single largest buy – 95 ads scheduled to run on KY3 the week before the election – cost Hulshof’s campaign a whopping $52,550. The price for 149 spots running the same week on KOLR10 was $25,245, according to contracts.

Nixon’s campaign spent nearly $195,000 on 422 ads that have aired – or are scheduled to air – on the two channels between Sept. 2 and Sept. 22. The majority of Nixon spots ran on KY3, which charged his campaign a total of $116,210 for the ads.

On the presidential front, McCain’s campaign hasn’t advertised on either channel this month. Obama, however, has purchased a total of 456 spots on KOLR10 and KY3 since Sept. 2 for about $150,000, according to contracts.

Mechlin said the total fundraising goal for Greene Countians for Fair and Impartial Judges is $100,000 – money that will likely be spent on less expensive forms of advertising, such as e-mail, newsletters and fliers.

“We’re looking at those creative solutions,” she said. “Voters need to have information. They deserve information.”

Back to bread and butter

TV ad rates are expected to stabilize as soon as the political races are decided.

“When all that pressure goes away, you get back to your bread-and-butter local people,” said Williams at Wannenmacher.

Despite the influx of political advertising dollars, KY3’s Scott said the station has attempted to balance the needs of those running for office with those hoping to promote their businesses. Many longtime advertisers saw the political pressure on the horizon and planned accordingly, he said.

“We and our clients recognize and try to plan for the increased demand for these few weeks leading up to the election,” Scott said. “Our goal is to protect those that take care of us year after year.”

Chambers said KOLR10 salespeople likewise worked with advertisers to avoid disruptions caused by the election cycle.

“What we’ve seen is a lot of the larger advertisers placing their buys earlier in the year than they may have in the past,” he said. “They know if they get time reserved early, then they have a much higher likelihood of keeping it.”

Both stations still have inventory available prior to the election, and Chambers urged businesses that have relied on TV advertising in the past to consider buying sporadic spots to keep up awareness.

“It’s understandable what individual businesses feel like they need to do on an expense front, but if you stop inviting people to come to your business, they’ll stop coming,” he said. “It’s a pretty vicious cycle.”

But Judy Stiles, head of media services at DL Media advertising agency in Nixa, said she’s advised clients to sit tight until the cycle ends in a few weeks.

“If a client can wait till afterwards, I’d do it, because now you’re getting lost in the middle of all the political advertising,” she said.