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Political Spending Will Boost Ad Sales

The Television Bureau of Advertising projects ad spending on spot television will stagnate in 2007, but rebound in 2008 on the strength of political spending.

In 2007, the TVB expects local spot sales to be flat to down 2 percent, and then rally up 8 percent to 10 percent in 2008, the group said at its annual forecasting conference Thursday in New York.

Such a two-year bust-boom cycle has become the norm in local TV ad sales, with Olympic and political spending buoying even years.

Indeed, such heavy political spending is driving this year’s local spot sales. Political advertising from state and federal candidates and issue-related campaigns is expected to hit $1.4 billion this year and could exceed the $1.61 billion spent in 2004, according to forecasts from TNS Media’s Campaign Media Analysis Group.

While some campaigns are shifting small amounts of money to cable and online ads, local television is still the prime vehicle for political spending, says Evan Tracey, COO of the Campaign Media Analysis Group.“State and local races continue to be married to television,” he said. “It is the biggest megaphone that these candidates have.”

Media analyst Victor Miller offered a slightly lower political forecast, calling for $1.25 billion in spending this year on local spot, down from $1.4 billion in 2004. (Some issue-related money makes up the gap in the projections.) Miller said the 2008 elections are expected to be so contentious that some stations could start to see ’08-related spending as soon as the first quarter of 2007.

Looking to the overall advertising market for next year, the TVB expects national spot sales to decline 7% to 9%, leaving total combined spot off 1 to 3%. Syndication and network cable are forecast to grow in the low single digits, while local cable will increase 2% to 4%. One bright spot for local stations, the TVB says, is station Web sites, where spending is expected to jump 30% to 40%.