U.S. media companies are set to see record midterm political ad spending, with some TV station groups set to register all-time highs in the category.
In the newest episode of "MediaTalk," a podcast from S&P Global Market Intelligence, TV advertising experts and analysts said this election cycle has generated strong political fundraising on both sides of the aisle. A number of competitive congressional and gubernatorial races are developing into heated contests. The addition of hot-button topics such as rising food costs, sports betting and reproductive rights is spurring a surplus of ads as Election Day nears.
"The predominant amount of dollars, which we're happy to see, is going to be in local broadcast TV," said Steve Lanzano, president and CEO of the Television Bureau Of Advertising Inc., the trade organization for the local U.S. broadcast TV industry. For some TV groups, their political ad revenue will rival, if not exceed, their 2020 totals depending upon their stations' footprint, Lanzano said.
Kantar Media Intelligences Inc. expects TV stations to realize some $4.2 billion in political ad revenue, though cable, digital and connected TV will also benefit from increased political outlays, according to Steve Passwaiter, Kantar's vice president and general manager for North America.
"No matter what, it is going to be a great year for political ad spending. And if you happen to be one of those media outlets, you certainly would have your catcher's mitt out right about now making sure you don't drop anything that comes your way," Passwaiter said.
News programming remains the genre of choice for political ad allocations on TV stations. But with inventory tight, especially in markets with hotly contested races, individual candidates, political parties and political action committees are looking to other programming to reach audiences.
The political set will tap the high reach of sports programming, like college and pro football and MLB's postseason, according to Passwaiter. "That one you can count on," he said, as well as "hall of fame" syndicated programming for political advertising, "Wheel of Fortune" and "Jeopardy."
Lanzano said suburban women will play an integral role in this election cycle, and campaigns will therefore target things like talk shows and court shows, which also attract older viewers who tend to come out in the midterms. Broadcast digital networks like Nexstar Media Group Inc.'s Antenna TV also appeal to seniors, and those networks are starting to rival mid-cable ratings, Lanzano said.
One new area having a major impact is connected TV. This segment allows political media planners to fill in some of the linear audience gaps being lost to cord cutting and also provides targeted capabilities.
Passwaiter said campaigns now also have the ability to follow voters from device to device and location to location. All of those attributes are propelling connected TV forward, "and it's really been propelled forward in this cycle," Passwaiter said. Kantar is projecting connected TV political ad spending will likely reach $1.5 billion.
Peter Leitzinger, an analyst at Kagan, a media research group within S&P Global Market Intelligence, also noted connected TV's incremental reach. Leitzinger said the number of broadband-only homes is also rising and that campaigns love the targeting value these platforms offer.
Leitzinger cautioned that connected TV remains largely unregulated compared to such digital forms as social media and search engines, and the potential for fraud could mislead advertisers on where content is being shown.
"It's kind of the Wild West on a lot of those platforms, and it's a little bit hard to sort through," Leitzinger said. He also noted that ad frequency is a concern, as a lot of those services just run the same ad repeatedly.
"I would say that there's still some things to iron out when it comes to political advertising on those streaming services," Leitzinger said.