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Political Advertising to Surge in 2010
October 22, 2009
It will rise 11% over '08 to $3.3 bil., but still lag behind the record-setting spending of '06
By Katy Bachman
Political advertising will hit $3.3 billion in 2010, an 11 percent increase over 2008, but a 4 percent decrease from 2006, according to a Wells Fargo Securities report released today.
The ad windfall, more than 60 percent of which goes to local TV, will be fueled by the election of 37 governors, 38 senators, the entire House of Representatives and issue advertising (which could approach $1 billion) on hot-button topics such as healthcare.
The factors affecting the 2010 forecast are similar to those that made the ad spending of $3.4 billion in '06 a record year for political advertising.
"2010 political spending will most closely resemble 2006, as it was the last time a large number of governor races were held, and congressional elections faced similar conditions (i.e., declining presidential and congressional approval ratings and contentious issues)," wrote Marci Ryvicker, senior analyst and author of the report.
Broadcast TV will reap the lion's share at $2.2 billion (or 67 percent of the total), with $2 billion going to local TV, $150 million to cable and $50 million to network TV. Direct mail will get $650 million (or 20 percent of the ad spend), followed by radio at $250 million (or 8 percent) and newspaper at $95 million (or 3 percent). Outdoor and the Internet are forecast to reach $55 million and $50 million, respectively.
A robust political advertising market couldn't come at a better time for the TV business, which has been hammered by the soggy economy and a sinking auto category. Political ads are likely to be large contributors to a modest increase for spot TV between 3.6 and 6.1 percent, according to the Television Bureau of Advertising's forecast.
TV groups most exposed to hotly contested races include Disney's ABC stations at 63 percent, Journal Communications (53 percent) and CBS (46 percent).
Although political advertising has made up only 3 to 5 percent of total revenue radio also stands to gain. Radio groups most exposed to political races include Disney's radio properties (63 percent), Beasley Broadcast Group and Regent Communications (both 61 percent) and CBS (58 percent).
"Any incremental ad dollars will contribute significantly to [radio's] year-over-year top-line growth, especially given the easy comparisons of 2009," Ryvicker wrote.
— Nielsen Business Media
Sales & Marketing Management Magazine
This article is brought to you by Sales & Marketing Management, the leading authority for executives in the sales and marketing field.
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