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Cable channels score big ad bucks on tight race

By
Claire Atkinson
Published Oct. 11, 2012, 4:00 a.m. ET

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President Obama’s debate stumble was a game-changer not only for challenger Mitt Romney but also for the cable guys.

With the race tightening just a month before the election, the political ad dollars are pouring into cable TV coffers, with political ad spending on track for a 67 percent jump this election cycle.

The late surge led Wells Fargo analyst Marci Ryvicker to boost her estimate for spending on local cable spots to $550 million, up from $467 million. In 2008, the last presidential election year, the cable industry took in a combined $330 million.

“Naturally we’re seeing an influx of money,” said Tim Kay, director of political strategy for National Cable Communications, which is owned by Comcast, Cox and Time Warner Cable.

The bulk of political ad dollars still flow to local TV stations. Broadcast spending is expected to crack $3 billion, from $2.1 billion the last time around.

Still, broadcast’s share of the political ad pie is roughly the same this year, while cable is gaining share, mostly at the expense of radio and newspapers, according to Ryvicker, who expects total political ad spending to hit $5.45 billion in 2012.

The cable guys tout their ability to zero in on voters at the ZIP code level — in contrast to broadcast stations that blanket the entire market. Cable operators can carve up markets, allowing candidates and political interest groups to, for instance, court urban moms or Hispanics with a certain income level.

While political ad buyers have largely kept their spending to the cheaper parts of the programming schedule, including early morning and daytime, on broadcast stations, they’re using cable — particularly local cable — for their primetime buys.

“We’ve seen a variety of candidates buy beyond the news networks,” said NCC’s Kay. “We’re seeing them appear on E! and on men’s networks. They’re buying deep too, averaging over 30 networks.”

Cable and satellite-TV providers get a few minutes of commercial time an hour from the cable networks they agree to carry on their systems.

ESPN is the most popular non-news cable network, followed by TNT and USA in terms of units bought. History and A&E also make the Top 10, along with Scripps’ HGTV and Food Network.

ESPN is capitalizing on politicians’ desire to go after young male voters — who have a huge appetite for football.

ESPN sold a package of ads, including college football, to NCC for $3 million. NCC will resell that airtime to political ad buyers.

Of course, the political ad spending picture could change again based on the migration of dollars to various swing states.

Ryvicker thinks that if voters lean toward Romney, then broadcast stations owned by Disney, CBS and TVL-LIN could benefit from another influx of cash to states where they boast a lot of exposure, such as Pennsylvania, Missouri and New Mexico.

“Should Romney continue this momentum, broadcasters should be happy,” she added.