2008 CABLE SHOW: Perils Of Pricing Political Ads

NEW ORLEANS—Cable systems are overestimating the value of their ability to demographically segment ads, charging double or triple what the spots are worth, according to political strategist Brad Perseke.

Perseke, a partner in GMMB, a political consultancy and advertising firm, which handled John Kerry's presidential campaign in 2004, warned ad salesmen that if they don't keep prices in line with those charged by local broadcast, “you'll lose.”

“You've always overpriced by 200% to 300%,” he opined.

Cable ad executives countered that there is value in cable's options for drilling down into the viewing audience, delivering more than just eyeballs.

“(Broadcast) gives bulk but who are those people? Are they registered to vote? Do they speak English?” asked Phillip Woodie, director of multicultural sales for Comcast Spotlight, mentioning just a few of the demographic and behavioral attributes that cable can use to segment.

The executives had their discussion as part of a Cable Show panel on capturing ad buys throughout the rest of this election year.

The panelists advised local salesmen to be aware of the greater political picture: a state with no strong local races could still have big ad buys if they are deemed "must win" states by either party. Such states this year could include Georgia, Ohio and Virginia, said Neil Schwartz, senior account manager for Arbitron Inc./Scarborough Research.

Other strong political ad sales states include North Carolina (tight congressional and gubernatorial races), Washington (virtually all major offices are up for re-election); Colorado (three Congressional seats and a Senate spot), Florida (where Democrats have made great gains registering voters to the party) and New Mexico.

Despite Perseke's view of cable pricing, cable has made double-digit gains in ad sales so far this election season.

“No one budgeted for the amount of money we took in the primaries, and 70% of the business is still in front of us,” said Rich Ambrose, vice president of political advertising for Time Warner Cable Media Sales. Following the tone set by Perseke, Ambrose added, “We need to price like we do for our other advertisers.”

And he advised against pre-empting political ads to accommodate core advertisers. The last thing a political campaign wants is a “make-good” check after the campaign, he said, adding core advertisers will still need to sell cars or pizzas after the election is over.

Perseke told local salespeople it's a little late to come knocking on a national political media buyer's door. A better strategy: report sales of local ad flights to National Cable Communications, which will get that information to campaign strategists. The competition will come knocking to counter the buy, he indicated.

 For more news from NCTA's The Cable Show '08, click here.